Turkish Investment Fund Inc (TKF): The High-Risk Game of Investing in Geopolitical Turmoil

Liquidity can be an even bigger concern among alternatives to ETFs. The closed-end Turkish Investment Fund Inc (NYSE:TKF) has been even more volatile than the Turkish stock market, as the limited availability of closed-end fund shares produces even greater disparities between net asset value and share price. Yesterday, the Turkish closed-end traded at a 13% discount to net asset value, but that discount has moved in a wide range between 6% and 15% at various points during the past year, with some of the biggest discounts coming on days of heightened activity among protesters.

Be careful out there
If you believe that the long-term prospects for emerging and frontier markets like Brazil, Egypt, and Turkey are good, then choosing times of maximum uncertainty can lead to greater profits down the road. But such investments aren’t for the faint of heart, and given the unique challenges that can arise, you shouldn’t count on orderly markets to trade in and out of positions frequently. Having a longer-term perspective can help you profit despite the high risk levels involved in investing in areas of potential instability.

The article The High-Risk Game of Investing in Geopolitical Turmoil originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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