Letter to investor + MACROECONOMIC OUTLOOK (by region) - Essay Example

As compass helps a sailor in sailing to the right direction, our portfolio also helps the invested funds to move towards appropriate path of earning higher returns. Thus we expect that our portfolio is going to excel the benchmark and will beat the benchmark in near future. Our aim is to hit the MSCI benchmark that is our benchmark. We follow the strategy of efficiently allocating invested funds by investing largely in large or medium cap business enterprises. Our key strategy is to direct the funds towards value stocks as the time period of this portfolio is very short, only one year.

This short time horizon does not allow us to put our prime focus on growth stocks. However, it does not mean that we never invested in growth stocks. In fact, we have invested in the growth stocks of Information Technology industry as it shows the best opportunity. We attempt to invest in defensive stocks to avoid cyclical economic fluctuations. It will take some time for the global economy to recover fully from the shock of the recent recession. Defensive stocks are able to generate higher returns than others during troubled times.

In terms of geographic segmentation of invested funds, we efficiently divided our funds between the USA, Europe and the rest of the world. Since the USA is the largest economy of the world and it is recovering at a very fast pace, majority of funds is invested in the USA. The second largest part of the funds goes to European nations as they are performing better than the other countries of the world after the USA. The rest of the world gets the remaining funds. Again, thank you for investing with us.

Sincerely Xxxxx MACROECONOMIC OUTLOOK United States The Unites States is the economic superpower of the world. But the recent economic recession was originated in this country. U.S.A has always been a dominant economic power in the world and it accounts for approximately 21 percent of the world economy. U.S. economic recession was held responsible for the global economic downturn as U.S. economy always influences economies of other countries in a major way. The major factor that has caused this huge economic downturn in U.S.A.

was a huge credit crisis. The credit crisis is held responsible for the closure of a number of investment banks across the world. This credit crisis actually originated from the U.S. home loan market. This credit crisis was triggered by busting of a housing market bubble in 2006. The prices of housing started to fall rapidly since 2006 and the market collapsed. The fall continued throughout 2007 and 2008. With the starting of the year of 2008, U.S. sub prime-mortgage market started to encounter several problems, which appeared to be difficult to deal with.

These resulted in an application of huge correction in this market, which had great implications for making credits more costly across the world. With the implementation of this correction, a large number of banks of the America, European countries as well as of Asia had been forced to write down billions of dollars in their holdings. More shocking thing was that a number of well-established and reputed banks like Lehman Brothers had to file for bankruptcy. The bankruptcy of Lehman Brothers is considered to be the biggest ever case of bankruptcy in the history of U.S. Since 2008, more than 80 firms in U.S.A.

only have filed for bankruptcy and a large number of firms have appealed to the government for financial