Investors Drawn To Asian Shipping, Logistics, Infrastructure

With growing concern surrounding the Trump administration in the United States, many investors are turning their attention to Asia’s economic giants. From China’s One Belt One Road initiative to India’s push for improved infrastructure, the investment community is being drawn to the opportunities to invest in the Asian region.

China

The Chinese government has spent decades investing both time and money into building a strong domestic economy. As a result of their efforts, China was able to withstand the challenges of the 2008-2009 global financial crisis and still flourish. The country’s continued growth at approximately six percent has supported an aggressive investment strategy that includes investing in international shipping, as well as logistic investments. Perhaps the best example of this is COSCO’s major investment in the Port of Piraeus, in Greece.

India

Once seen as simply a source of cheap labor and manufacturing, India has emerged as an economic giant – not only in Asia, but in the world as well. To support the country’s steady growth above five percent, Indian officials have begun investing in ports and infrastructure. This has created opportunities for the international investment community to invest in shipping, logistics, and infrastructure in the region.

ASEAN

The Association of Southeast Asian Nations (ASEAN) is a regional organisation made up of ten Southeast Asian states, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam. The group focuses on establishing and supporting partnerships in economic growth, social progress, and socio-cultural evolution. This approach has resulted in a strong regional economy that grew at nearly five percent in 2016.

Albeit many of the economies mentioned above are regarded as emerging markets and developing countries, their continued track record of growth and opportunities are giving investors the confidence they need to invest. With Western nations still experiencing economic challenges, their potential for growth is not as great as those of the East’s leading economies. For many investment-seekers seeking profitable opportunities, this means pursuing¬†investments in foreign countries and regions across the globe; in particular, Asia.

If Investing In Your Region Is Limited Seek Options Elsewhere

Sometimes it is difficult to find investments in your own country that perform the way your portfolio needs them to. This is particularly true when the domestic economy is sluggish and growth is inhibited. In this economic climate, profitable investment opportunities are a challenge to locate, and sometimes even more difficult to invest in. In this instance, investors must look abroad for potential investing options.

In the last year, some of the world’s developed economies experienced events that created problems for governments, economists, and investors. Two of the most well-known were Brexit in June 2016 and the election of Donald Trump as the American President in November 2016. Events like these rattled the investment community and affected sentiment in the British and EU markets.

The troubles in some of the leading developed countries has opened the door for emerging markets to attract investment seekers. Areas that might have once been overlooked are stepping into the spotlight and presenting viable opportunities to invest in. Powered by strong economic growth of six to seven percent per year, emerging economies are becoming a very popular investment destination.

At the moment, many of the countries in Asia offer great prospects for investing. It seems that during the last decade, while North American and European economies have been busy recovering, Asian giants like China and India are experiencing record growth. Fortunately for investors, with this prosperity comes opportunities for them to invest and make money. Such opportunities exist in the shipping industry.

The logistics and port industries across Asia have been expanding rapidly to meet the rising demand for shipping services. Continuous investment in these sectors is needed to accommodate the countries’ industrial growth, and facilitate their economic expansion. From ship-to-shore cranes to cargo container investments, institutional and private investors are investing in world trade and supporting booming economies.

Do not be discouraged if your opportunities for investing in your country are limited. Seek out international investments in core industries that diversify your portfolio holdings and compliment your existing investments. Using this approach will expand your options, and in some instances reduce exposure to risk and increase profitability.

Considerations When Determining Investment Risk Tolerance

When determining tolerance for risk, the most important question to ask is: when will the investment returns will be needed? If the time horizon is relatively short, risk tolerance should be more conservative. For a long-term investment outlook, there is room for more aggressive investing, because investors have more time to recoup any possible losses and are therefore theoretically more tolerant of higher risks.

Net worth and available risk capital should be important considerations when determining risk tolerance. Net worth is simply your assets minus your liabilities. Risk capital is money available to invest or trade that will not affect your lifestyle if lost. Therefore, an investor or trader with a high net worth can assume more risk. The smaller the percentage of your overall net worth the investment or trade makes up, the more aggressive the risk tolerance can be.

Regrettably, those with little to no net worth or with limited risk capital are often drawn to riskier investments  Рlike futures, options, or collectibles Рbecause of the lure of quick, easy and large profits. This approach is dangerous because when too much risk is assumed with too little capital, an investor can be forced out of a position too early, resulting in a loss. By investing only money that you can afford to lose, or afford to have tied up for some period of time, you will not be pressured to sell off any investments because of panic or liquidity issues.

When it comes to determining an investor’s risk tolerance, the answer will vary based upon the age, investing experience, net worth, and risk capital of the investor, as well as by the actual investment being considered. Younger investors can take more risk because of the long-term strategies they are employing. Conversely, an older individual has a shorter investment horizon, and would have a much lower tolerance for risk.

It is important for investors to understand the idea of risk and how it applies to their investing portfolio. Making informed investment decisions entails not only researching investment reviews, but also having a deep understanding of one’s finances and risk profile.