News broke earlier today that Hugo Chavez has decided to nationalize a couple of large utility and telecommunications companies in Venezuela, including CANTV (VTN), whose trading was halted on the New York Stock Exchange (though not before dropping 15%), and Electricidad de Caracas owned by US-based AES Corporation (AES).
Regular readers of this site probably remember that I own a few ETFs and find them a convenient way to get exposure to foreign markets. In fact, ILF is an ETF specializing in Latin America, and I’m curious to see how the news about Venezuela will affect it tomorrow, if it will at all.
The truth is that I’ve stayed away from investing in Latin America, largely due to my husband’s influence and opinion about the region. He grew up in the Dominican Republic and has plenty of experiences to share about how things work in many Latin countries. That doesn’t mean that Latin America’s a place to avoid — in fact, it’s very possible that because of our lack of objectivity, we’re missing out on good investment opportunities.
Still, news like today’s is a good example of the risks of investing in emerging markets, regardless of region. When investing in them, it’s easy to focus on the high double-digit growth rates and forget about underlying risks. Even though I don’t have any direct exposure to Latin America in my investments, I’ll still be watching how things develop in Venezuela with great interest.
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George
Good reminder to us about geopolitical risk. What does you family think about Brazil?
Ricemutt
I’ll ask him tonight. He seems to think Brazil is much more geopolitically stable (largest economy and all that), but we’ll see.
financeguide101
Is Asian countries are worthy to invest? Like China and India???