Global Investing
Post on: 4 Май, 2015 No Comment
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China has been in the news quite frequently the last few months. Whether its been the stories of large
offers to purchase American-owned companies, or their gradual rise in status to economic super-power,
the Communist nation is clearly making waves in the world markets.
China is making aggressive moves to one day rival the U.S. in economic dominance on a global scale.
According to U.S. News and World Report, in the year 2020, Chinas economy will pass Japans to
become the second largest in the world. Second, of course, only to the U.S. Chinas major industries
include oil and petroleum, as well as telecommunications. And the country is home to an estimated 2
million people who have a net worth of a least $40 million. That number is only expected to grow, and
with it, so will opportunities for investment.
Diversification has long been a basic rule of thumb for investment. But never
before has there been such a wide range of opportunities for diversification
outside of the U.S. and those opportunities only seem to increase daily.
Chinas experiment with capitalism means more and more opportunity for U.S.
investors who wish to tap into an ever-growing and potentially lucrative
worldwide market.
Many experts differ in how much global investment to keep in your portfolio.
Some warn to stay away completely. The world markets have not always done
so well, and are often volatile, which is one more reason to keep a sensible
balance within your portfolio between foreign and domestic holdings. But
others recommend investing up to 20% or more of your portfolio in the
worldwide markets to increase diversification. Diversification seeks to reduce
risk while maximizing returns by investing in dissimilar asset classes. It should
be noted that this strategy does not prevent losses from occurring in a down
market.
A great deal of the emerging markets success, experts believe, can be
attributed to restructuring by countries around the world. Many believe that
Japan is expected to start moving from a manufacturing economy to a service
economy soon. Experts believe that the transition will bring numerous potential
opportunities for success, both in Japan and across the globe
So how do you take advantage of such a global economy? While something
can be said for buying and supporting the U.S. China and many other
developing countries, offer a distinct opportunity for global investment in an
emerging market. Opportunities abound for investment in global funds,
indexes, or bonds, and other global investments which target specific
countries or a group of countries. All of these added markets and countries in
your portfolio can lead to greater diversification in an attempt to minimize risk.
As the world moves forward, economies are gradually shifting and always
adapting. The ones that are doing it quickly and efficiently are seeing a great deal of success. Investing
in global markets is not without risk. The volatility can be extreme at times. But thats why diversification
has become such a popular investment strategy. With the proper balancing and a specific investment
strategy formulated with a financial professional, you can invest in countries across the world and
potentially take advantage of world growth. And add a bit of international flavor to your portfolio in the
process.
International stocks entail special risks associated with international investing, including currency
exchange fluctuation, government regulations, and the potential for political and economic instability,