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Health & Fitness

International Investing - Turkey

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.

Turkey

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It is a nation with a rich cultural history, a country that once was seat of a global empire, and a population that straddles both Western and Eastern cultures. Situated geographically between the Eurozone and the Middle East, Turkey can offer lucrative investment opportunities for international investors. While there are risks — political, geo-political, and economic — the country is growing fast and has certain characteristics that can leave it poised for sustained economic growth in the medium and long term.

Turkey has been growing at a rate far in excess of other local economies, but that rate did fall from 8.5% in 2011 to 2.2% in 2012. This reflects on of the core weaknesses of the Turkish economy — tepid domestic demand, the EU debt crisis, and slowing growth in China. These weaknesses, however, can be offset by the numerous reasons that Turkey might make a profitable addition to an investment portfolio. Centrally located, with a large (and growing) population of approximately 80 million, the domestic market is healthy and becoming more so. Turkey is centrally located geographically, and through negotiations on oil and natural gas pipelines, the nation is attempting to position itself an energy hub for the Eurasian continent. Infrastructure improvements and an accommodative government are aiding in Turkey’s economic development.

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

Some top Turkish firms that are available for investment via ADR are Akbank (financial services), Anadolu Efes (Beverages), Aygaz (oil & natural gas), Bank Asya (financial services), and Dogan Yayin (media). ETFs and mutual funds that are available for investors to utilize include iShares MSCI Turkey Index Fund, and the Turkish Investing Fund, Inc.

As always, I have attached some links with more information

Happy Reading!

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