With one of the largest populations in the world, China promises huge potential for mass consumption. For investors looking to invest in consumer products and services, the “sheer population” of China is an important factor to consider, Pham says. “If even one product was purchased by each Chinese household, it would generate over a billion unit sales.”
Not only does China offer a large population, but also its largest city, Shanghai, recently became a free-trade zone. This means Shanghai “will allow foreign companies to invest freely into banks, shipping ventures, travel agencies and medical health insurers,” Pham says. “Also, restriction will be taken off in some telecommunications services and on the production and sale of video game consoles. Foreign investors will easily move capital into and out of China.”
While the new free-trade zone makes China more attractive to investors, it also serves as an example that “even developed countries also change their policy and method of trading frequently,” Pham says. While such regulation changes often serve to make the country more investor-friendly, foreign investors are wise to continually monitor government reforms and policy changes.
Very quietly, Brazil is about to become the fifth-largest economy in the world, Katsman says. The South American country is “loaded with natural resources and filled with young people,” he adds. “Brazilian government policy has enabled a lot of entrepreneurship with lower taxes, and there are a lot of people making a lot of money.”
While Brazil offers great investment opportunity, it remains an emerging market that requires careful research. “It’s a really interesting time to get into the Brazilian market, but it’s very much two steps forward and one step back,” Katsman says. “Investors should be warned that there is volatility when you invest in these markets.”
Europe’s economic woes have been widely discussed, but that doesn’t mean investors should write off the whole continent. “I’m not overly optimistic about Europe in general, but European markets are slowly coming out of the recession, and there are a lot of opportunities,” Katsman says. “There are some European companies that pay higher dividends than U.S. markets that are very interesting.”
Over the past several months, the United Kingdom has been “the star” in Europe, with a strong currency and intriguing economic prospects, Katsman says. Germany is another strong leader worth considering.
When looking to invest in Europe, keep in mind that the individual company is more important than its location. For instance, “Spain is in bad shape, so investors want to stay away, but just because a company is domiciled in Spain doesn’t mean they do all their business there,” Katsman says. He notes that one Spanish bank conducts 80 percent of its business in Latin America, pays dividends around 10 percent and has continued to pay those dividends throughout the entire recession.