January 02, 2007

NRIs look to emerging markets

In 2007, where can NRIs get the best returns for their investments in stocks? The quick answer is, in the Bric (Brazil, Russia, India and China) countries away from the traditional markets of the US, Britain, Japan and Europe that offer more security but lower returns. In 2006, the highest returns were from the Bric countries; the other three Bric countries had higher returns than those from India! Since these four economies are on sound growth path, it is reasonable to assume that their stock markets, barring any catastrophe, will keep growing in 2007. Since money flows instantly to obtain the best returns, the entire telecom-linked globe is one investment market today. So bankers and financial advisors keep tracking every economy for best investment returns. Some developing economies such as Hong Kong, Singapore and Mexico also offer healthy returns. In this scenario, 25 million NRIs living in over 110 countries have to be alert where their funds can get the top returns. "A crucial factor is the period of staying invested," he said. "An analysis of historical data shows that the probability of losing money diminishes greatly as we increase the investment horizon. What is risky over a one-year period may not be so risky over a five-year period." "The negative return in a given year is averaged out by positive returns in another year. But the time horizon of investment must be looked into within the overall economic scenario. Equity investments over a short period are always risky and one could lose or make money depending on when one exits. 'Finally, does the NRI investor have the time to research the markets and the stocks he should be investing in?' asks Durgan, who specialises in mutual fund investments for NRIs. //Source:http://www.gulfnews.com/business/