We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

International Investing-IP3 - Essay Example

Comments (0) Cite this document
1) Portfolio diversification is a technique of reducing risks by allocating investments throughout different classes of financial instruments, industries and other relevant categories (Investopedia, 2011). Some investors use random diversification without taking into account investment characteristics such as return on investment or industry classification…
Download full paperFile format: .doc, available for editing
Polish This Essay93.7% of users find it useful
International Investing-IP3
Read TextPreview

Extract of sample
"International Investing-IP3"

Download file to see previous pages One way to diversify is to buy financial securities of the same asset class, but in different industry sectors that are directly affected by a different kind of variables (Yahoo, 2011). For example one can invest in stocks from the energy sector, while simultaneously investing in stocks of the computer technology related stocks. Since economic and market factors affect different industries differently, by investing in a variety of sectors, there is always a good chance of having one or more of your investments outperforming the market average. Diversification also focuses on investing in different classes of assets. For example since bonds historically have a tendency to perform better when stock performance is declining it serves well for a savvy investor to allocate a percentage of their investment portfolio in the bond market depending on the investors level of risk aversion. 2) As many investors already know the market value of a security is determined by a variety of financial, market and socio-political factors. The volatility of the market value of investments is a risk all investors have to accept and plan for. Since the world economies are becoming more interconnected and correlated changes in one market can spread like wildfire to other financial markets. Some argue that for U.S. investors the benefits of investing internationally might be less compared with other countries due to the wide variety of highly diversified multinational corporation stocks available to U.S. investors though local markets as a well developed and diversified economy. There is still a lot of room for the savvy investor to allocate part of its investment portfolio in the international markets especially in emerging markets or underdeveloped economies. Even when due to their degree of correlation, international markets and domestic markets move in the same direction the degree of response to the same situation might be completely different. There are more opportunities for above average returns between emerging economies and industrialized nations since the level of correlation between them is much less. Therefore opportunities abound for extraordinary returns in international markets, albeit at the expense of an increased level of overall investment risks and potential losses. 3) There are many reasons to invest in international markets: Maximum portfolio performance - many investors shy away from investing internationally since they view it as too risky or complex. As a matter of fact although most U.S. investors tend to focus their portfolio domestically, more than 75% of the global economic and over 50% of the total world’s equity market capitalization comes from the international markets (Ishares, 2011). As a matter of fact, international IPO’s now outnumber domestic IPO’s and while international investments are typically more volatile than their U.S. counterparts. They are forecasted to have higher rates of growth than their domestic counterparts. Lower portfolio volatility-By investing in international securities investors can lower portfolio volatility and maximize their return on investment. The use of a single type of investment instrument increases the risk associated with the investment alternative. When investors invest in both the domestic and international markets they are opening the doors of opportunity due to the fact that the investor has the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“International Investing-IP3 Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from https://studentshare.org/environmental-studies/1420993-international-investing
(International Investing-IP3 Essay Example | Topics and Well Written Essays - 1250 Words)
“International Investing-IP3 Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/environmental-studies/1420993-international-investing.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Investing in Energy assignment 03
However, by the time I opened my eyes to the world Saudi Arabia too was welcoming all kinds of gadgets that made life easier to live. My family was a small one with my father acting as the main breadwinner and my mother playing out her role as the typical housewife.
2 Pages(500 words)Essay
International Investing-DB3
A major con of this strategy is that the profitability for the companies is lower because there are intermediaries in the exporting game that are taking away a large chuck of the profits. An alternative market strategy that Mr. Swanson should consider is foreign direct investment.
2 Pages(500 words)Essay
A major British international food retailer has appointed you as a consultant. The company is considering investing in one of th
These factors range from the political system to the environment, to social structure and in other cases, they include technological advancement, infrastructural development, cultural differences and type of governance (Schwab, 2011:33). For companies wishing to expand their business operations towards the Asean countries, they must be aware of the issues that will affect their businesses hinting that just a few of these speak the mostly known languages such as English and/or Spanish (Daniels, Radebaugh and Sullivan, 2011:75).
10 Pages(2500 words)Essay
Pro/cons of International Investing
Reputation: If The Natural Detergent Inc enters foreign markets its reputation will increases both at domestic and international levels. It would demonstrate Natural Detergent’s buying capacity
2 Pages(500 words)Essay
International investing
This method makes it possible for a household to own part of the business and share the expected monetary rewards without actively managing the firm. In addition, an
3 Pages(750 words)Essay
WBS elements can be a product or a service, which provides a framework for a detailed estimation of cost. WBS in the project management is deliverable oriented decomposition of the project in smaller components. WBS also provides a framework of natural
3 Pages(750 words)Essay
The hospital is ranked third in New York in terms of the services provided to patients in the market. The hospital combines adult and pediatric services to ensure a high client base. The products mix to
4 Pages(1000 words)Essay
Budgting ip3
This memo also describes how the organization should use an activity based budgeting, as opposed to an operating based budgeting. This memo will also provide the similarities and differences of
3 Pages(750 words)Essay
It has now expanded to frozen products, pharmaceutical products, cereals etc. Nestle produces a variety of products and all with only one thing in
4 Pages(1000 words)Essay
International HRM: International Electronics
From the paper, it is clear that international HRM deals with issues related to human resource of the multinational companies and their foreign subsidiaries. The process includes but not limited to sourcing of candidates with relevant skills and knowledge base, recruitment and selection of those candidates, imparting necessary training...
13 Pages(3250 words)Book Report/Review
Let us find you another Essay on topic International Investing-IP3 for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us