Investing in different countries is entirely reliant on the same principles that investing in anything relies on: risk and reward. So, when deciding which countries to invest in for the current market, it is essential to dive into both of these factors in evaluation. Investors may choose to evaluate a nation’s financial situation based on their own judgement or look to the ratings given to many nations by agencies that are designed to determine risk, just like in the stock market. The major factors that are needed to be critically thought about include the country’s political and economic situation, as well as stability and if there is room for growth. Countries in the EU right now are on a wide spectrum in terms of where they should be ranked for investment value, and this article will try to take a perspective on risk and reward.
The first country that will be analyzed is Germany. Other than Russia, Germany has the greatest population in the European Union as well as some of the biggest cities such as Berlin, Munich, and Frankfurt. With the largest European economy, they export more than any country in the world besides the U.S. and China. Germany is considered to be a good country to invest in, with a stable political structure and such a strong economy. With that being said, there are still risks in German investment, mainly based on their demographics. In particular, the average age has slowly increased with a greater amount of people reliant on welfare in retirement. This still is not a major concern relative to the strength and solidity of Germany’s political system and economy, and it is still a good country to invest in.
Another country in the EU that is worth evaluating is France. Another one of the largest economies in Europe, France has large home-based companies and strong markets that make France a good country to invest in. With that being said, France also has some risk factors, including some socialist tendencies such as shortened workweeks and a lower retirement age than many countries. These do have small impacts on the competition that many occur between companies, but similar to Germany, the reward and stability outweigh the risk to a degree that makes France dependable as an investment.
The last European country that will be discussed is Croatia. Croatia, while certainly not the largest economy in the continent, has been constantly discussed among one of the countries with the most upside. Croatia is becoming incredibly strong among tourists with beautiful beaches and infrastructure. In addition, it has a strong workforce that is close to all the other big European hubs, as well as most being multilingual. Croatia is a fairly safe investment with high upside and is certainly recommended.
While every country must be evaluated on a case-by-case basis, there are some non-EU countries that are worth investing in. Once again, the major factors that determine whether a country is a good investment are the risk and reward. Countries like India, Australia, and Vietnam are all countries with emerging markets, some form of stability, and high upside. These countries, among others, should be considered when investing.
To end this thought, choosing to invest is less of a decision between EU and non-EU than it is a country-by-country basis. With that being said, being part of the EU gives countries a safety net of bailouts and stability that make them lower risk than independent countries outside. These investments can prove profitable and smart in the long run.
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