As the world’s larger economies react violently to domestic political shifts, smaller emerging economies look increasingly attractive for foreign investment.
The establishment Western economies were hit hard by the Brexit referendum and Donald Trump’s unanticipated yet successful bid for the U.S. presidency. Rather than play the role of international market stabilizers, the world’s first (U.S.) and fifth (U.K.) largest economies injected shock waves of fear onto international trading floors when the unexpected prevailed. The pound hit a record low following the referendum. American markets showed steep losses and then dramatic gains as investors anticipate greater unpredictability when it comes to the policy choices of president-elect Trump’s incoming administration.
Big economies have big ripples. But select smaller markets can escape the waves of uncertainty that cripple the leading global investment hubs. During periods of economic uncertainty, look to smaller economies that offer investment opportunities insulated from outside turmoil.