Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Here’s Why I’ve Got My Sights Set on Emerging Markets
Jasmine Birtles
30th Jul 2024
It’s that season once more when countless Brits take to the skies, heading to warm destinations throughout Europe and beyond.
This year, it looks like your investment portfolio could use a little getaway too!
In recent months, emerging markets have demonstrated their resilience, making it an opportune moment to consider investments beyond the UK and US.
In this week’s column, I want to explore the advantages of incorporating international stocks into your portfolio and spotlight three emerging markets that have caught my attention.
Emerging markets in 2024 so far
So, why am I exploring opportunities beyond the UK and US?
Well, emerging markets have been thriving this year, while the same can’t be said for the US or the UK!
For those unfamiliar, ‘emerging markets’ refer to economies that have experienced significant growth and share many traits with developed economies.
These markets often present substantial growth opportunities and can be quite profitable—if you know what to seek out!
In 2024, various emerging markets have made impressive progress.
India’s economy has enjoyed over 8% growth for three consecutive quarters, driven by advancements in manufacturing and a surge in investment activity.
Meanwhile, Indonesia has recorded a GDP growth of 4.91%, largely due to falling inflation rates that have encouraged consumer spending.
Similarly, China’s economic growth is expected to hover around 5% in 2024, following strong Q1 GDP data fueled by increased investment.
In contrast, the UK’s GDP grew by only 0.7% in Q1 of 2024, while the US experienced an even lower growth rate of 0.3%.
It’s essential to remember that the UK and US are not classified as ‘emerging markets,’ which means their economies have less potential for growth.
Nonetheless, I believe it’s still worthwhile to explore your options!
What are the benefits of investing in emerging markets?
Investors often avoid emerging markets due to their initial intimidating nature.
However, investing in these markets is just like purchasing UK stocks and shares. Not to mention, it can offer numerous advantages!
Specifically, investing internationally is an excellent method to diversify your investment portfolio.
Diversification involves spreading your investments across various assets rather than concentrating them in one area. This strategy helps lower risk by minimizing the impact of significant losses.
By diversifying with emerging markets, you can offset any losses experienced by UK and US markets (especially during the upcoming presidential election!).
Moreover, investing in emerging markets provides exposure to economies with significant growth potential. This makes them an attractive choice for long-term investors.
3 emerging markets to watch in 2024
Let’s explore some of the emerging markets that are catching my attention for the year 2024!
First up, we have India. This country has been exceeding expectations with its economic performance, showing no signs of slowing down. With a growth rate of 8.2% between 2023 and 2024,
India’s economy is thriving due to high demand for its goods and robust industrial activity.
I personally think it’s a good one to watch!
Next on the list is Guyana, which is currently experiencing the fastest economic growth globally.
In 2023, Guyana’s GDP surged by an impressive 38%, primarily fueled by the booming oil production sector.
This growth has propelled Guyana to become one of the wealthiest countries in South America and the world.
However, potential risks such as inflation and political instability should be considered by investors eyeing this market.
Last but not least, Vietnam is another emerging market worth keeping an eye on.
With a growth forecast of 5.5% in 2024 and a potential increase to 6% by 2025, Vietnam’s economy heavily relies on foreign direct investment and a thriving agriculture sector.
While not as flashy as Guyana or India, Vietnam’s resilience and stability make it an intriguing prospect for investors.
Remember, economic growth is subject to various external factors, so thorough research is crucial before diving into any investment opportunities.
Emerging markets can be an excellent way to diversify your portfolio. However, there is no guarantee that the markets will move in your favour!
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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