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Health & Fitness

International Investing - Portugal

The world is a big place – there are over 190 countries and 7 billion people in the world, which really boggles the mind if you sit down and think about it. In addition to being an interesting intellectual exercise, this fact can also have broad implications for your investments and your financial future. It is easy to stay focused on U.S. firms, news, and events during the day-to-day grind, but it is always important to be aware of your surroundings – especially when it comes to your investments. With that in mind, this series of articles will focus on countries and investment opportunities outside the United States that you might not usually hear about.

As always, be sure to consult a financial services professional familiar with both the potential investment and your unique financial situation before embarking on any investment program.

Portugal

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Beautiful beaches, excellent weather, and lots of great tourist activities are what usually comes to mind when Portugal comes to mind. The holiday destination of many northern Europeans in search of warmer weather and sun, there is a thriving tourism industry that exists within the country. There are, however, significant economic problems that have occurred since the financial crisis of 2007-2008. The country is still recovering from the housing bubble that caused havoc worldwide, and continues to struggle with unemployment and with getting their national finances in order.

There are, however, numerous reasons why Portugal could be considered a for international investment. A highly-developed national infrastructure is essential to any nation’s continued economic success, and Portugal does have a highly-developed infrastructure and logistical support. The location of Portugal means that firms positioned there have access to the entirety of continental Europe, the largest economic zone in the world. In addition to these advantages, the government has been promoting a very pro-growth, pro-business environment in order to help facilitate an economic recovery. Last but not least, it is worthy to note that the nation has very strong historic, cultural, and economic ties with one of the largest BRIC economies – Brazil.

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When looking at investing in Portugal, there are two primary ways to go about it – ADRs or direct purchases. An ADR is basically a certificate held by a U.S. banking institution that represents a certain number of shares in the foreign company, and is held by the U.S. institution. This helps to cut down on the administrative fees and other costs that would otherwise be incurred. For more direct exposure, you can also purchase shares directly from Portuguese stock exchanges if your broker offers those services to its retail investor base (you and me).
Some of the largest and most liquid ADRs that are available for investors to utilize in order to invest in Portugal include Portugal Telecom (Telecom), Altri (Forestry & Paper), Banco BPI SA (financial services), Banco Comercial Portugues (financial services), and Energias de Portugal (electricity). While there are no specific ETFs that track Portugal, there are several that track it to a certain extent — MSCI Portugal Index and the Guggenheim Timber Index are two might be worth examining.

As always, I have attached some links with more information

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