Investing abroad can seem like a major decision for many people. There’s a lot of uncertainty surrounding this topic; it’s often seen as too risky, with few advantages.
However, following events like the Covid-19 pandemic, social unrest, or the uncertainty surrounding the constitutional process, many have begun to consider this possibility. Investing abroad can be a good way to protect yourself from local political and economic volatility.
Another aspect to consider is that in an interconnected world, there are increasingly more financial platforms that make it easier to engage in this type of business, allowing for risk diversification and access to growing markets.
These are all important factors when considering a Plan B in the face of economic challenges. Let’s dive into these points a bit more.
1. Risk Diversification
Diversification is a fundamental strategy to mitigate risk in an investment portfolio. By participating in international markets, investors can reduce their exposure to local economic factors, such as currency fluctuations or changes in fiscal policy. Geographic diversification can lower the volatility of investments and improve risk-adjusted returns.
2. Access to Growing Markets
Investing abroad allows you to seize global opportunities. It’s possible to access high-growth markets that may not be available locally. Regions like Asia-Pacific and some emerging economies in Africa and the Middle East present significant opportunities for expansion and economic development. According to World Bank data (2023), these markets have shown sustained growth in key sectors such as technology, renewable energy, and manufacturing, offering higher potential long-term returns.
3. Protection Against Local Economic Volatility
While Chile’s economy remains relatively stable, it’s not without risks, such as reliance on raw materials and potential fluctuations in international copper prices. Investing abroad provides a hedge against local economic volatility and fluctuations in the Chilean peso. According to an analysis by Bloomberg, having investments in different currencies and regions can protect investors’ wealth from local currency depreciation and other macroeconomic risks.
Bonus Track: When investing in dollars or euros, a favorable situation can arise for investors—namely, the negative correlation between global stock returns and the dollar/Chilean peso exchange rate. “When global stocks fall, the dollar tends to appreciate against the Chilean peso, offsetting part of the losses in pesos; when the dollar weakens, global stocks tend to rise, again moderating the impact in pesos,” explains Omar Larré in a column on Fintualist. This rule, combined with the points mentioned above, can be a useful tool for mitigating risks and losses when investing abroad.
How Can AIM Global Help You?
As experts in international mobility, AIM Global can offer you excellent opportunities for investing abroad. We can present you with highly secure options as well as innovative and profitable alternatives to develop your projects.
We are familiar with incentive programs and funds offered in collaboration with the European Union aimed at fostering economic growth, innovation, and sustainability, which give investors access to practically zero-financing projects. Finding suitable investment opportunities for different investor profiles is a key part of our work.
We know that every case is unique, and we strive to offer you products that match your interests, from investment funds to real estate. Schedule a meeting with our team and let us help you become a global citizen.
