Dhaka Stock Exchange, Bangladesh

Remember the heady days of just a couple of years ago, when China’s economy was growing at near double-digit rates? No longer. The BRICS are still growing, of course, but their wild teenage years are coming to an end. And as these markets have begun to cool, investors are venturing even farther afield. The new buzz is about “frontier markets,” a motley collection of dynamic countries — from Persian Gulf petrostates to mineral-rich African countries — that promise rapid growth and low correlation to developed (and troubled) markets like the eurozone. But politics in these countries often matter as much as economics. Corruption, political instability, and weak-to-nonexistent regulatory infrastructure are common on the investment frontier. Then again, so are the jaw-dropping returns that have made these markets hot. In other words, these are the markets that have the potential to boom when everyone else is going bust — even if they can blow up at a moment’s notice. More…