This post was contributed by a community member. The views expressed here are the author's own.

Health & Fitness

International Investing - Spain

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.

Find out what's happening in Wyckoffwith free, real-time updates from Patch.

 

Spain

Find out what's happening in Wyckoffwith free, real-time updates from Patch.

 

The E.U. debt crisis that has been an ongoing issue since 2008 has been particularly tough on the so-called "southern European" economies, which include Spain. The news concerning the property bust, ensuring failure of numerous construction-related industries, and the level of unemployment, dominate the headlines. While these are not insignificant challenges, and will result in a tumultuous investment environment for the next investment period, there are still opportunities available for investment in Spain that might be appropriate for your risk profile.

 

Some of the primary reasons behind the potential investment in Spain is the low cost of many inputs, which include labor. As a result of the financial crisis and higher than average unemployment, the prices of many inputs, including labor, has decreased. An increasingly accommodative government has spurned large capital investments into R&D, specifically in the bio-tech and pharmaceutical industries. Hand in hand with the funding for R&D, the Spanish legal system is one of the most progressive in the world. In the information age, protection of patents and intellectual property is a definitive competitive advantage. Last but not least, the location of Spain places it as a the gateway from Europe to the Mediterranean and North Africa, a total of 1.3 billion potential customers.

 

When looking at investing in Spain, 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 Spanish stock exchanges if your broker offers those services to its retail investor base (you and me).

 

Some of the most well known Spanish firms that are available for investment via ADR include Banco Santander (financial services), Telefonica (telelcommunications), Iberdrola (electric utility), and Repsol YPF (oil/natural gas). Some of the most widely traded ETF's with exposure to the Spanish economy include iShares MSCI Spain Capped ETF, SPR Euro STOXX 50 ETF, and iShares MSCI EMY ETF.

As always, I have attached some links with more information

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?