U.S. investors have access to foreign stock markets more than ever before. This gives investors the freedom to pick markets based on their own. They are no longer forced to buy a single fund with a global stock or BRIC (Brazil, Russia, India, and China) mandate.
How can investors compare investments in different countries with different currencies and legal protections for property rights? To do this, investors need to assess the risk of investing in a particular foreign market (in terms of property rights, wealth confiscation, etc.) as well as assess the valuations of assets in these foreign markets.
To examine the prospects of different foreign stock markets, different markets were screened for discounts to Purchasing Power Parity (PPP) of their currencies versus the dollar. To assess the risk of investing in nations with the cheapest currencies, Investment Freedom and Property Right scores were collected from The Heritage
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