The Risks Of Investing In Emerging Markets
Investing is always risky business; corporate scandals regularly surface in the news, corporate bonds are frequently downgraded, accounting fraud is often revealed and market imperfections such as the flash crash continuously bring a level of uncertainty. Even the most stable domestic blue chip companies will face times of tremendous volatility. 1) Foreign Exchange Rate Risk
2) Non-Normal Distribution
3) Lax Insider Trading Restrictions
4) Less Liquidity
5) Difficulty Raising Capital
6) Poor Corporate Governance System
7) Increased Chance of Bankruptcy
8) Political Risk
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