International trade can seem tricky even in the most developed economies, so foreign investors need to be vigilant when investing in global markets where political risks are difficult to discern. With the rise of trade between emerging markets and developed markets such as Canada, the challenge of political risks has become more pronounced in the past few years. Though traders can’t avoid political risks in the global marketplace, some of these risks are rewarding. For example, these emerging markets have over time become a consumption hub that creates a lot of opportunities for foreign investors. The following are the common types of political risks that have an impact on the success of any business. 

Conversion and Transfer 

Central banks and foreign governments can prevent the transfer of their hard currency or decide to prohibit or restrict the conversion of their money to a foreign currency. For example, a company that produces oil can use its banking system to bar its importers from obtaining foreign currencies to raise the price of its oil products and consequently increase its foreign exchange reserves. The move will make it hard for a local oil manufacturer to pay foreign suppliers in time. 

Government Interference or Expropriation 

A foreign government has the power to confiscate, seize, or expropriate the investment of a company with no justification or for no apparent reason. A foreign government can even decide to adopt specific measures to confiscate the assets of a foreign investor. Either way, an enterprise can lose its assets or foreign investment. For example, an attempt to overthrow the government can result in the closure of any company thought to be behind the effort. It could be through the imposition of unrealistic regulatory requirements to try to kick a domestic firm out of the market. Foreign markets such as Canada might need to add due diligence to any of such companies to determine its relationship with its local authorities. 

Political Violence 

Political violence such as civil strife, war, and terrorism can destroy and damage the assets of a company. Political violence can even make it hard for a firm to undertake its essential functions. For example, violence can erupt in a market when an ethnic group demonstrates against political injustices and government discrimination. The county may even be forced to declare a state of emergency due to the confrontation between protesters and law enforcers. The investment and assets of a foreign firm are likely to be demolished if protesters perceive it as receiving favoritism from the local authorities. However, foreign firms can address this issue by not only partnering with the state but also the local communities. 

Political Risks to Consider 

The impact of any of these political risks on a foreign investor is short-lived or isolated, and it can ripple across the entire firm and aggravate other risks. As a result, foreign investors should be prepared for any unexpected or sudden political gamble that may hit them. However, the fundamental elements of a strategy of any emerging market are political risk analysis, ongoing research, and due diligence. As such, an investor might consider diversifying their overseas investments to ensure that their risks aren't concentrated in a few emerging markets. 

Also, you might need to have a political risk mitigation strategy depending on the possible risks in an overseas market. Foreign investors also need to have a plan to respond to any political uncertainties that may arise. Alternatively, a company can involve its stakeholders in the formulation of its risk mitigation measures. An investor might need to brief agents, suppliers, and customers on their contingency plans for handling any political risk and coordinate with their risk response team. Preparing for even unexpected political risks can make it quicker to recover from adverse political violence and enable an enterprise to coordinate its response team with its key stakeholders.

The Keys to Investing 

For a new investor, the stock market can be a tricky thing to navigate. There are constant ups and downs in individual stocks and just as much variety for the stock market overall. Even though it can seem risky, investing can have huge payoffs in the end. People have been known to make hundreds and thousands from simple investments. To put it into perspective, an Amazon stock cost $18 in 1997. Now it costs around $1,630. If you had invested in one stock back in 1997, you would have made over $1,000 from just $18. Some people make it a part of their lives to invest in the stock market, and others do it as their jobs because there is so much profit to be gained from investments. To help you get started with investments, here are the keys to investing.

1. Do Your Research

Before you start investing, you should have a general idea of the important aspects of the stock market. Make sure that you know the difference between the different terms that are used. For example, you should know that if you invest in the S&P 500, it is like investing in the top 500 companies in the market. You should also be aware of foreign investment and the benefits of it. You should also know that there is no absolute trend to the stocks. There’s no moment that you should wait for before you invest. The stock market is nearly impossible to predict, and you need to keep that in mind. Don’t pay too much attention to people who make guesses about the direction the stock market is headed. Do some research on your own and pay attention to the events that happen in the real world that might affect the stocks.

2. Don’t Sell Your Stocks When It’s Red

The stock market is constantly in a state up green or red. Green means that the stocks are up and gaining. If they’re red, it means that you’re losing. A person who is new to the stock market might be tempted to sell the stocks as soon as they start to lose money on them. The problem is that then you lose money that you won’t be able to earn back. The best way to handle the situation is just to wait out the red phase. The market always goes back to being green so unless you need the money within the next few days, leave it where it is. The best way to take advantage of stocks is to forget that you have money in it.

Studies have shown that women make more money off the stock market because they do two things right. Women are more likely to leave their stocks where they are, and women do less trading. Both of these help your stocks to gain rather than lose.

3. Set Long-Term Goals

In the stock market, you want to set long-term goals rather than short-term goals. Think of the money in the stocks as an investment. You shouldn’t look to make thousands of dollars overnight. Just like when you put your money in the bank, they slowly give you rewards (usually just a dollar every couple months). The stock market does the same thing but with greater rewards. Think of the stock market as another bank account and let it stay there until you actually need the money. Alternatively, it would be a good idea to learn how to do your own banking. This would have numerous benefits for you. Just research what's called the infinite banking concept and see how it can change your life for the better. 

The stock market is something that, if you know how to handle yourself, you can gain a lot from it. The best time to start investing in the market is now. Don’t wait for things to get better or for things to get worse. Instead, just start by putting a small amount in and then wait until you’re more comfortable to continue investing. It’s fine if your first investment is just $100. If you don’t even have that much, try with $10. As long as you’re getting used to the way the stocks move and work, it doesn’t matter how much you put in. Just continue to learn and grow with it.