WARNING – take the plunge … dive into the
best stock markets of the World
Buy stocks and shares …it is inevitable that they will definitively affect your wealth.
This is all very well, but where to begin?
(1) Which Markets do you choose – there are a million questions to consider…here are but a few.
Are things really flying in Brazil?
Is mining in the Philippines about to take off?
Is China overcooked?
Is the United States of America really bankrupt with its Trillions of dollars debt?
(2) Which sectors are the ones that will perform; is it IT (remember the ‘dotcom’ company meltdown); commodities (aren’t the prices skyrocketing); energy (isn’t that controlled by Russia); consumables (doesn’t that depend on American spending), construction (The Middle East is booming with its incredible building projects) communications (mobile technology is taking over the world). The fact is the list is endless…
(3) What to buy, when to buy, where to buy, are all million-dollar questions. Perhaps we should say “million yen questions” because, let’s face it, the US dollar is clearly a failing currency. Ah, there we have it: which currency to invest in?
BUT let’s back track a little, because the very first decision is actually “how to buy”?
Luckily, there is a clear path to choose for the uninitiated, and this approach will also be taken by the sophisticated investor as part and parcel of a more sophisticated portfolio in an effort to spread the risk amongst a number of investment baskets.
Step one is to look at the wide field of choice offered by investment funds. Hundreds of stock market funds haggle for your attention. Fund managers, big and small, old and new, general and specialist, all wave their menu of choices at everyone, in yet another quagmire of brilliance and confusion!
“When America sneezes the stock markets of the world catch a cold.”
In Europe there has always been the stock market saying “Sell in May and go away”
The big wide World likes to think that it is independent of the USA, and over the years this is increasingly the case. The world boasts of its resilience and gloats at the relatively feeble profits in North America, and it is clear that Asia is booming, with China and India as market leaders, between them hosting over 1/3rd of the world’s population.
Then something happens, like the recent housing mortgage fallout and the ripples ensnare institutions and corporations around the globe. The press rubs salt on the open wound and the crisis festers. Then just as we start believing that the world is doomed, the stock markets will hit new record highs. All is forgiven and profits pour in again.
The fact is that the stock markets of the world in a general sense are indeed inter-linked, and when one big market falls they all follow suit. It is an insipid cycle of intent.
BEWARE – Buying Asian stocks will make you fat profits, pay for a few exotic holidays and cover a host of extravagant flings and weekend getaways.
A Stock Market Choice
Risk – ‘No pain no gain’ emphasizes the chance of winning or loosing.
High Risk – means lots of profit or lots of losses. Timing is everything. No one knows all the answers, but you can have a hunch based on a pile of percolated information. High risk works both ways – when things are good the returns are fantastic.
Low Risk – does not necessarily mean ‘small returns and small losses’. When times are good, low risk funds can also fatten the calf. But generally, so long as money is not left to rot in safety in a plain bank account, then returns will be welcomed in the long run.
Taking the plunge in ASIA. Everyone is jumping up and down over China, India and Russia. No wonder, because the returns have been phenomenally good in recent years.
The LOGIC- if there is going to be growth in the world in general it is going to be in Asia. Forget the sophisticated markets, go for the undeveloped and exotic countries in Asia. China is the brawn of Asia; India is the brain of Asia; the Philippines is the heart of Asia.
Beyond Stocks – something to remember.
Non-stock investments are a pool of opportunity. Hundreds of fund choices are also available in this arena. There is a whole world out there uncorrelated to stock returns, some linked to underlying stocks but others non-correlated. These deserve a basket of opportunity across the spectrum of choices.
Stocks are only one part of the big jigsaw of investing.
The good news is that there is a realm of investments beyond stocks and shares, and investors are not dependent for profits on this single market arena.