Whereas risk adverse investors may be deterred from entered these afflicted nations, aggressive individuals may find funds like TUR and THD attractive. As we witnessed in the initial days following the Japanese earthquake and tsunami, it is not uncommon to see droves of investors pile into afflicted regions in hopes of taking advantage of the eventual recovery and rebuilding efforts. Any exposure, however, must be kept small. Additionally, investors should remain flexible. In the event that headwinds crop up and sentiment turns south, individuals must be prepared to take steps needed to mitigate losses.
As we have seen throughout 2011, it is difficult to anticipate where the next natural phenomena will take place. This does not mean, however, that investors can not prepare themselves. By maintaining conservative exposure to emerging markets, it is possible to lessen the negative effects of natural, political, and economic upheavals.
Written by Don Dion in Williamstown, Mass.