If you make a living in trade and finance, it’s hard to miss how much opportunity there is when you move into global marketplaces. There’s a lot you can do, even if you spend most of your time in one place, but you need to have an investment strategy that covers all your traditional bases, including risk management and due diligence. South American opportunities has been expanding lately due to a number of factors, including the large-scale commitments on the part of the Colombian government to infrastructure projects designed to support the country’s economic development.
This has, in turn, increased economic activity in neighboring countries by opening up new transit routes and providing contracts to support the Colombian projects. That makes the entire northern coast of South America rich in opportunity, including countries like Guyana and Ecuador. The Colombian investment in infrastructure has made trade between the northern Pacific coast countries and the northern Atlantic coast countries easier than ever before, and the economies of those nations are responding. If you’re looking at investing in the area, here are five great ways to help your odds of success.
1. Understand Demand
Whether you’re buying stocks, commodities, or real estate, trading involves understanding the ebb and flow of supply and demand. Even venture capitalists need to be able to see developing trends to pick out the companies likely to capitalize on them because of a combination of timely development, geographic position, and vision. Today’s market has opportunities for capital investment in many industries supporting infrastructure construction and trade, but it also has opportunities for those who can identify under-valued resources shortly before their demand increases. Knowing the way industries in the region interact is vital to investing wisely in it.
2. Put Boots on the Ground
You can trade commodities from a desk or a laptop wherever you happen to be, but if you don’t know the environment contracts are being traded in and the people who are seeking those commodities as end users, you’re going to miss out on information that could be vital to your decision-making process. That’s why you need to make a point of visiting the countries where you invest your money, even if you’re not operating a business in-country. Foreign trade is an intelligence game, and the more you can do to understand every market you move into, the better. It helps with everything from Forex speculation to material commodities if you can spot the undervalued assets.
3. Find Local Partnerships
Local financial institutions are going to be vital if you’re a foreign operator in a market. For people looking to invest in Guyana, for example, GBTI offers services that are tailored to the foreign trade community. That makes it easier to work with the country’s money when doing Forex investment, as well as resources for other forms of trade. Local financial institutions also offer a range of services useful to companies taking contracts in-country and investors starting businesses there.
- Business loans
- Credit financing
- Savings and checking accounts
Electronic banking makes it easy to move money into and out of a country by transferring between your accounts in different locations, but you need solid banking partners in each country to enjoy prompt transaction times and low fees. Reliable operators also make a practice of referring investors to other reliable institutions.
4. Diversify Your Commitments
There are a lot of single-market traders out there, but they tend to come in a couple of general varieties. Either they totally dominate a marketplace with resources groomed to do so, or they are operators who don’t have the funds to sustain a portfolio that reaches out geographically. Even if you only do stocks or you only do commodities, participating in multiple marketplaces provides you with the opportunity to execute bigger and better trades, and to maximize your returns by moving funds to the most active marketplace of the moment. If you are remaining in a single location or region, expanding your portfolio with a variety of strategies provides a similar hedge against market instability. A combination of the two can be very powerful if you have the resources to balance your priorities.
5. Think Long-Term
You need to keep an eye on your timing if you want to get the most out of each deal, so this isn’t a call to put less attention on the here and now. At the same time, if you don’t put regular time into planning your medium and long-term strategies, you won’t have the guiding vision you need to make good decisions intuitively when the pressure is on. Make sure to support yourself by defining some boundaries around that planning time, and consider doing something like writing draft memos to yourself to keep track of your progress as you flesh out your ideas.
South America is the investment hot spot of the moment, especially its northern coast, but these principles will suit you well as you move into new markets around the globe. The key is developing a sound process for setting up and overseeing new investments abroad. Once you have that, it gets easier and easier to establish yourself in new markets as your portfolio grows.