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Investors who enter a new high-growth market first reap the highest returns over time.”

Low correlation. Correlation is a measure of how investments perform in relation to each other. . According to Seruma’s research, from January 2002 through June 2009, an African composite index of eight countries had a correlation of 0.59 with the S&P 500, 0.66 with the MSCI EAFE Index (which measures developed markets outside of North America), and 0.60 with the MSCI Emerging Markets Index.

Investors can use correlation statistics to find out how to better diversify their portfolios.”

Strong growth expected. “According to projections from the World Bank, nine of the 15 countries in the world with the highest rate of five-year economic growth are in Africa. ”

Profitable companies. There are a number of well-known companies that are based in Africa, including South African Breweries (a subsidiary of SABMiller) and telecom company MTN. Africa’s total stock market capitalization now exceeds $1 trillion.

Demand for commodities. “As the BRICs industrialize, they’re going to be demanding more and more of these commodities.”

Increasingly less violent. According to Freedom House, 63 percent of Africa’s population now lives in countries designated “free or partially free.” Compare that with Asia, which has a score of 66 percent.

China’s involvement in the region.Many Chinese companies—some of which are backed by the government—have made significant investments in Africa.

Infrastructure spending. Countries are  beginning to stay and help make important infrastructure improvements in the continent

Low debt. Concerns about sovereign debt—the debt that governments owe—has made headlines in Europe. Countries like Greece, Portugal, and most recently, Ireland have seen their debt downgraded by ratings agencies like Standard & Poor’s. The United States also faces a huge budget deficit.

Growing investment from abroad. Africa is ahead of Brazil, India, and Russia. It’s second only to China.

Attractive valuations.The average price-to-earnings ratio for African companies is about 8 to 9 percent compared with the S&P 500, which has an average P/E ratio of about 15 or 16 percent.

Young demographics. Compared with other regions of the world, Africa has a much younger median age, which means African governments aren’t as burdened by elderly populations and pension plans. It  could also  mean that  Africa has a young, vibrant workforce.

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