Friday, April 28, 2006
Offshore Investing
Offshore Investing: "Offshore investing: spreading risk helps sleep
The world’s economies still dance to different tunes and have different boom and bust cycles that tend to offset each other, even though the differences are getting smaller. As a result, international stocks can provide diversification for a portfolio heavy in U.S. stocks.
Between June 1997 and October 1998, for example, Japan’s Nikkei index lost almost 40%, but European markets did well due to continental economic union. U.S.-style corporate restructurings also began to pay off. One region’s success balanced the other’s failure to get its financial house in order.
There has been less divergence between regions more recently. Even so, we suggest the prudent investor cannot afford to ignore overseas markets. They now represent some 44% of world market capitalization, up from 25% about 30 years ago. International stocks can provide solid diversification for a portfolio heavily invested in U.S. equities.
Exchange rates add an extra flavor to foreign investments. Fluctuations can add to or detract from profits or losses. Institutional investors and others pay significant attention to this factor. When the U.S. dollar was appreciating against the Japanese yen, billions of dollars flowed out of that country and into U.S. stocks and bonds, worsening the economic crisis in Japan. That money started to flow back out when the c"
The world’s economies still dance to different tunes and have different boom and bust cycles that tend to offset each other, even though the differences are getting smaller. As a result, international stocks can provide diversification for a portfolio heavy in U.S. stocks.
Between June 1997 and October 1998, for example, Japan’s Nikkei index lost almost 40%, but European markets did well due to continental economic union. U.S.-style corporate restructurings also began to pay off. One region’s success balanced the other’s failure to get its financial house in order.
There has been less divergence between regions more recently. Even so, we suggest the prudent investor cannot afford to ignore overseas markets. They now represent some 44% of world market capitalization, up from 25% about 30 years ago. International stocks can provide solid diversification for a portfolio heavily invested in U.S. equities.
Exchange rates add an extra flavor to foreign investments. Fluctuations can add to or detract from profits or losses. Institutional investors and others pay significant attention to this factor. When the U.S. dollar was appreciating against the Japanese yen, billions of dollars flowed out of that country and into U.S. stocks and bonds, worsening the economic crisis in Japan. That money started to flow back out when the c"
# posted by eastern media @ 11:19 PM 
