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Risk / Reward Ratio Is Too High For Thailand ETF

I have mixed feelings about the iShares MSCI Thailand Capped ETF (NYSEARCA:THD), On one hand, it appears the share price is ready for a breakout, but on the other hand, there are way too many negatives to propose investing in this country ETF. Let's start with technical analysis. Glancing at the price chart above, it seems that THD is on the verge of a breakout from the descending channel, and the long-term resistance level.A closer look shows that the share price will likely continue the upward trend started in Jan 2016. I interpret this as bullish. But before coming to any conclusions on this investment, let's have a look at Thailand's economic and political situation.

Thailand historically has had a strong economy, but it experienced slow growth Following the May 2014 coup d'etat, when the army seized power. Tourism decreased 6-7%, Thailand's foreign investment and GDP growth suffered due to political uncertainty. In 2015, Thailand's economy grew just 2.8%, the country's exports decreased by 5%, and the Thai baht depreciated more than 8%. The death of the king recently and the ensuing royal transition have caused additional fluctuations in the Thai economy.

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by Steve Auger