How to Invest in Undeveloped Countries

Undeveloped country investments have the potential for big gains.

Keeping money in the bank ensures that it will not grow over time and that it is only saved. Investing money in a variety of investment opportunities ranging from real estate to stocks and bonds helps money grow over time and improves personal finances. Investing overseas diversifies a portfolio and limits the risks of putting all investments in the same area. Undeveloped countries, such as Egypt, Nigeria and other African nations, have a potential for growth, though the risks are high, making investments in these countries more speculative in nature.

Instructions

1. Invest in stocks and funds. Stocks are an investment in a specific company. The stock is related only to one company. Funds are made up of many stocks, bonds or similar investments. There are country funds or funds made up of specific types of companies. Open a stock account or open an account with a broker and put some money into either an undeveloped country company stock or in an emerging market fund that includes the countries of interest, such as Egypt, Nigeria or China.

2. Invest for the long term. An undeveloped country has extreme fluctuations in the price of the stock. The stock price will rise and fall daily and sometimes will drop or rise dramatically over the course of a single day. The fluctuations can make an investor nervous, but an undeveloped country will often rise in the long term. Always plan for long-term investment when picking stocks, bonds, funds or other investment opportunities in undeveloped countries.

3. Research the company or fund. Never invest blind. Always look at the company and spend time researching before putting money into an investment. Look up company information online and read news articles about the company. Look at the company stock history, the recent profit statements and the company policies to determine companies that are good investments. When looking at a fund, run an Internet search on the fund and find out what news reports are suggesting about the fund. Undeveloped countries often have lower cost investment opportunities, but the cost of the investment is only one aspect. If the company does not meet your criteria, pick a different company.

4. Diversify the investments. Never put all your investments in emerging markets and avoid putting all the money set aside for investments in undeveloped countries into one investment. If 10 percent of the money you have to invest is for undeveloped countries, split it into three or four parts. Then put the money into different types of investments that are unrelated, such as an African mining stock, a Middle Eastern oil stock and a Brazilian speculative stock or funds related to different underdeveloped countries.

References

• The Motley Fool: 13 Steps to Investing
• The US News: 12 Reasons to Invest in Africa
• Money Week: The Best Ways to Invest in Africa

Resources

• Trade Invest Africa: Business, Trade, and Investment Opportunities in Africa