Investors across the world lack knowledge of the various markets around them. This may be attributed to a home-bias as people are mostly familiar with the functioning of markets in their region, and aren’t savvy enough about the global market scene. As a prudent investor, it is critical to crucially observe the performance of markets across the world, so as to make smart and informed investment choices. Another reason for this information debacle is the fact that it is difficult to acquire hands-on information on listed companies from foreign companies. Even if a part of the information is available through online sources, the investment process is a time-consuming and difficult process. For example, an Indian investor would lack information on popular Chinese products, just as a Chinese investor would lack much knowledge on the performance of profitable Indian products. Thus, lack of transparency in investment process combined with the ignorance of the global market arena can be attributed to this trend.
In order to stop the growth of this discerning trend, several fund houses across the globe have come up with global investment schemes in order to facilitate purchasing of mutual funds across geographical barriers. These global schemes invest in the stocks of companies that are listed in foreign companies, thus, enabling investors to cross all major purchasing barriers. A smart move today for investors would be to make investments in the Asean market. The Asean comprises five major countries namely Philippines, Thailand, Singapore, Indonesia and Malaysia. It also comprises of five peripheral countries like Myanmar, Laos, Brunei, Cambodia and Vietnam. Investment in the Asean market is seen as a smart and calculative move today as it complements the increasing investment opportunities in India. With many listed companies in profitable sectors that are not largely present in India, the chances of making profit are many. For example, tourism is a major source of earning in these countries, thus, making a profitable avenue for investors in this sector. While the scope of tourism as a major market player is expected to further grow over the years, investors in the country can safely make investments in this avenue. But the good news does not stop here: various other sectors like food, the hospitality industry, recreational products and so on are deemed to be highly profitable ventures for investors in the next few days. It would be interesting to wait and watch the performance of the Asean markets with respect to these sectors.
But since Mutual Funds are subjected to market risks it is very important for you to get firsthand knowledge about these markets from primary sources as this will give you the ability to make informed decisions. Otherwise opting for debts like personal loans, home loan etc, to fund your requirements will be the last resort if you lose out on your investments due to wrong investment decisions. Make sure that you analyze the funds on the basis of their performance not only in the respective markets but also how they fair on the global standards. Analyses should be made on the facts as to how the fund has performed in various market cycles- boom and busts. Also, the stability of the funds in such market conditions is also important to take note of. As a prudent investor, it is important that the standard of a fund should align with yours. If the particular fund’s objective is to invest in market indices and take risks, then your funds are likely to be invested in such heavy weights. In such scenarios, you as an investor should also have the same game plan of investing into such risky propositions.