How do Investors Choose Where to Invest?

This post discusses how individual investors and investment funds choose the industries and parts of the world that offer attractive opportunities.

Investment With a Purpose

If you are unsure around the purpose for investing, then it is probably an industry that you should leave well alone. That said, while the general reason people invest is to make a healthy equity return, they may also be motivated by the potential of discovering a new technological innovation, the next great green energy source, or even the cure for a global killer, such as cancer.
Whatever the reasons for people investing, their motivation will be a key factor in determining where they choose to invest their capital.
We looked at what investors look at in order to make their final decisions.

Developing Areas

One key investment area for many funds and other investors is developing countries. The great thing here is that it leaves open a whole range of possibilities for investing across a wide variety of sectors. It may be that you wish to invest in a West African state where there is great potential for mining certain materials, or that you are interested in being involved with the development of exclusive properties in countries such as Turkey or the ex-Soviet states.
On a local level, it may even be the case that there are opportunities within a deprived town or city in an investors’ home country.
Where investors choose to invest is often driven by their need to build up their reputation, too.

Brand Recognition

Many investment groups who are unknowns from the Arab states or the Far East often invest in London or other European cities first. With many opportunities for development and massive returns across Asia and Africa, why do they do this?
Simply, it is so they gain recognition as a global player. Returns in many European cities are not going to particularly lucrative, however the doors that will open from being known as a successful investor in London against an unknown one from Jeddah are plentiful.

Looking to the Future

For investors who look very long term with their commitments – we’re talking 10 to 20 years – it is a case of often working with economists and other professionals to try to predict what will be big in the future. Those who invested in early development of green technologies in the early 90’s, for example, are doing very well out of their initial investment now, while there are also many opportunities coming up now that could be lucrative in years to come, including advanced green technologies and food production markets.

Author Bio:

Dealmarket offers an extensive global private equity platform for both investors and those looking for investors.