Investors are always hunting for profits, and right now so-called frontier markets, or markets in developing countries, are among the hottest markets around. Many so-called frontier markets, which include non-traditional investment markets, such as Myanmar, Argentina, and Vietnam, have been enjoying considerable attention from investors over the last few years. Risk in frontier markets Frontier markets are among the highest risk, as frontier economies are usually smaller and more prone to fluctuations than other emerging markets, such as China. The MCSI Frontier Markets Index, a leading index for measuring frontier markets, is up more than 19 percent this year, vastly out performing developed and more traditional emerging markets. So far this year, foreign investors have pumped in some $2.2 billion dollars into foreign markets. This compares with outflows of only $720 million dollars. While this might not seem like much in the context of multi-trillion dollar financial markets, for small emerging countries this amount of funding can be immense. Foreign Investment a Double Edged Sword For emerging markets, the inflow of cash provides much needed financing for economic development. With the Cold War over, money is no longer being used the United States or former Soviet Union to buy allies. And roaring nineties have long since cooled off, so many wealthy countries are simply no longer as generous with their development funding. Private markets, however, can provide access to financial resources for companies located in emerging markets. While development markets have largely stagnated over the last few years, emerging markets are still enjoying relatively high levels of economic growth. So for many investors, these frontier markets are looking more attractive than ever before. A reliance on foreign cash, however, carries risks with it. For one, investors could cause a bubble to build, and when it pops, the country could be left off worse than before foreign investment started to flow into the country.