How do Investors Choose Where to Invest?
This post discusses how
individual investors and investment funds choose the industries and parts of
the world that offer attractive opportunities.
Investment With a Purpose
If you are unsure around
the purpose for investing, then it is probably an industry that you should
leave well alone. That said, while the general reason people invest is to make
a healthy equity return, they may also be motivated by the potential of
discovering a new technological innovation, the next great green energy source,
or even the cure for a global killer, such as cancer.
Whatever the reasons for people investing, their motivation will be a key factor in determining where they choose to invest their capital.
We looked at what investors look at in order to make their final decisions.
Whatever the reasons for people investing, their motivation will be a key factor in determining where they choose to invest their capital.
We looked at what investors look at in order to make their final decisions.
Developing Areas
One key investment area
for many funds and other investors is developing countries. The great thing
here is that it leaves open a whole range of possibilities for investing across
a wide variety of sectors. It may be that you wish to invest in a West African
state where there is great potential for mining certain materials, or that you
are interested in being involved with the development of exclusive properties
in countries such as Turkey or the ex-Soviet states.
On a local level, it may even be the case that there are opportunities within a deprived town or city in an investors’ home country.
Where investors choose to invest is often driven by their need to build up their reputation, too.
On a local level, it may even be the case that there are opportunities within a deprived town or city in an investors’ home country.
Where investors choose to invest is often driven by their need to build up their reputation, too.
Brand Recognition
Many investment groups who
are unknowns from the Arab states or the Far East often invest in London or
other European cities first. With many opportunities for development and
massive returns across Asia and Africa, why do they do this?
Simply, it is so they gain recognition as a global player. Returns in many European cities are not going to particularly lucrative, however the doors that will open from being known as a successful investor in London against an unknown one from Jeddah are plentiful.
Simply, it is so they gain recognition as a global player. Returns in many European cities are not going to particularly lucrative, however the doors that will open from being known as a successful investor in London against an unknown one from Jeddah are plentiful.
Looking to the Future
For investors who look very long term with their commitments
– we’re talking 10 to 20 years – it is a case of often working with economists
and other professionals to try to predict what will be big in the future. Those
who invested in early development of green technologies in the early 90’s, for
example, are doing very well out of their initial investment now, while there
are also many opportunities coming up now that could be lucrative in years to
come, including advanced green technologies and food production markets.
Author Bio:
Dealmarket offers an extensive global private equity platform for both
investors and those looking
for investors.
