Investing abroad

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15. Investing in other markets

Markets in countries other than those already mentioned are extremely difficult or impossible for UK investors to get into. But if you develop a passion for some market in the back of beyond, and you have enough money and determination to act on it, you should first familiarise yourself with the career and writings of Jim Rogers.

Rogers is now a fund manager based in New York. He first made his name running a highly successful hedge fund in partnership with George Soros. Later, he went on to invest money all over the world on behalf of private clients. His specialty is breaking into little-known or stagnant markets that he believes are due for major runups or recoveries.

For instance, he bought heavily into the neglected Austrian market in 1984, when it stood at only half of its value in 1961. The following year, that market rose 145%. He was also an early investor in Portugal, Malaysia, Brazil and Indonesia.

Rogers has written a book about his experiences and methods. It is called The Investment Biker and describes how he travelled around the globe on the back of a motorbike, easy-rider style, in search of investment opportunities. A shorter introduction to the man and his style appears in The New Money Masters by John Train. This lists Rogers' four 'tests of a good country' for investment:

1. The country must be doing much better than it had been.
2. It must also be better off than is generally realised
3. The currency must be convertible.
4. There must be liquidity for the investor
   'I always like to be able to get out of something if I'm wrong,' [says Rogers].

Source: The New Money Masters, John Train

Rogers also emphasises that low valuations are a necessary but not sufficient criterion for investing in a foreign market. In addition, there must be some identifiable trigger for revaluation, or what he calls a 'catalyst'. An obvious example would be new government incentives for outside investors, such as allowing foreign companies to launch takeover bids for the first time.

Footloose as ever, Rogers has just embarked on another round-the-world trip. You can follow his itinerary and read his latest thoughts via his website millenniumadventure.com.

1. Why invest abroad? 2. Risk and reward in foreign investment 3. Custody risk 4. Currency risk 5. UK companies are foreigners too 6. Foreign unit and investment trusts 7. Picking foreign trusts 8. How to make the most of trusts 9. Tracker funds for foreign markets 10. Foreign companies on the London exchange 11. American Depository Receipts 12. Investing in American companies 13. Investing in European companies 14. Investing in Asian companies 15. Investing in other markets 16. Dividends and withholding taxes 17. Markets go global 18. Conclusion

• Mobius on Emerging Markets