In an article for Corporate Compliance Insights.com recently, Benjamin Wey of the New York Global Group offered three key ways to mitigate risk when investing. As a starting point, Ben Wey advises that those who are interested in a large return potential with a China-based company should, "compare how the company is trading between the U.S., Hong Kong and mainland China.
The second piece of advice offered by Benjamin Wey was to make sure to do your research and to act with due diligence. As he said,"Stand-alone, top-line research is not enough when it comes to any form of due diligence, but especially when applied to BRIC investments. To mitigate loss and maintain a stable, lucrative portfolio, investor institutions must look beyond balance sheets and earning statements. And, therein lies the crux of local-to-foreign investments. One way to determine whether a retail company’s earnings are accurate and whether sales are as promising as stated is to look to its value chain. Is the company ordering quantities of material that agree with its announced sales? Local knowledge and cultural familiarity are often critical to successful due diligence."
Finally, he warns that working alone can help an investor only so much. External resources are helpful and should be considered for those who are serious. Such resources, Benjamin Wey says, include "dealmakers, consulting and advisory firms, and target market experts."