Verified Document

Political Factors And Investors Essay

Related Topics:

International investing offers a unique opportunity to investors to diversify their portfolio, manage risk more effectively and take advantage of significant political, social and economic events in other parts of the world. However, international investing has some downside to it as well. This paper will discuss the pros and cons of international investing and recommend a best market to pursue for investors seeking to offshore at least some of their wealth. The pros of international investment are that it can help increase an investor's total return in their portfolio. By adding assets international markets that are minimally correlated to investments already in a portfolio, one's risk is reduced. Mitigating risk is one of the most important concepts in investing, and the more that one can advantageously diversify a portfolio, the more likely one's return is to be positive.

International investments can be particularly appealing when an event occurs within a foreign nation's social, economic or political spectrum that will impact companies or other assets based in that region. For instance, the Russian stock market has nearly doubled since 2014 and for international investors the steady climb over the past 2 years has been a unique opportunity to benefit from strong leadership under Putin and a more advantageous role for the country in its dealings with China and Iran. Meanwhile the S&P 500, while achieving significant growth in the same time span did...

Parts of this document are hidden

View Full Document
svg-one

Moreover, the two markets do not share the same risks: the U.S. is much more deeply in debt than Russia, while the latter country's interest rate is more than 10x higher, indicating that Russian Government Bond 10Y yields would pay a much better return than a 10-year U.S. bond (Trading Economics, 2017).
The cons of international investment are that one can run into illiquidity in the marketplace and be unable to exit a trade at a desirable price. The same economic, social and political factors that can lead to potentially big returns can also flip and lead to potential losses. Investing overseas also brings with it higher fees from brokers than the fees normally associated with domestic investment. Currency risk is another issue: when investing overseas, changing the U.S. dollar for the foreign currency has risks associated with currencies rising and falling in value. Should more countries determine to the leave the EU, for instance, investment in the Euro could backfire if the…

Sources used in this document:
References

Nguyen, J. (2015). The 3 biggest risks faced by international investors. Investopedia.

Retrieved from http://www.investopedia.com/articles/basics/11/biggest-risks-international-investing.asp

Trading Economics. (2017). Russian government bond 10Y. Retrieved from http://www.tradingeconomics.com/russia/government-bond-yield

VanEck. (2017). VanEck international investors gold fund. Retrieved from https://www.vaneck.com/library/vaneck-funds/inivx-fact-sheet-pdf/
Cite this Document:
Copy Bibliography Citation

Related Documents

Intelligence Policy Political Factors That
Words: 3186 Length: 10 Document Type: Term Paper

The necessity to safeguard intelligence information from parochialism and political pressures will be a strong argument in promoting a centralized and strong capability. This is contrary to leaving decisions that affect critical intelligence related concerns solely to the makers of policy. Centralization of policymaking process faces the politicization risk that stems from the department of DCI. It is only the Congress, the President, and Senior National Security Officials who can

Socio-Political Factors Encountered by Hispanics/Latino-americans
Words: 729 Length: 2 Document Type: Essay

6 million of the 17.3 million eligible Hispanic voters cast a ballot (Kaufman 2007). The language barrier might be yet another reason that Hispanics struggle to find a foothold in American society. ESL programs often fail to address Latino's needs in schools. Latinos have the highest high school dropout rate of any ethnic group in America, and there is no statistically significant difference between drop-out rates for immigrants or the native

Socio-Political Factors of 911: Motivations and Responses
Words: 2260 Length: 8 Document Type: Term Paper

Socio-Political Factors of 911: Motivations and Responses Whereas terrorism against American targets abroad has been all too common, most Americans have tended to believe themselves safe from such horrors at home. However, September-11 terrorists' attack on World Trade Center at New York ended this illusion (White, 2003). To end the threat of terrorism against the American people, we must know the true reason why we American are so hated in other

Economic and Political Factors That
Words: 828 Length: 3 Document Type: Term Paper

With Eastern European nations enticed by the financial aid and political support that the U.S. And Britain provided, it became easier for them to weaken the hold of Communism. Furthermore, because Communism and a socialist economy were still in its infancy, the effects of a proletarian-led society did not bring out the expected results among these Communist nations. In effect, primarily due to the strong political influence and economic

Political Reasons Behind the Electricity Dilemma in
Words: 5828 Length: 20 Document Type: Essay

Political Reasons Behind the Electricity Dilemma in Haiti What it will take to have electricity in Haiti Cost Cost is one of the significant factors that contribute significantly to the development of electricity in Haiti. Since the investment in the sector of electricity has been extremely slow, combining the aspects inclusive of the non-payment culture for electric services, low-based metered customers, and fair consumer tariffs contributes significantly to electricity accessibility. The consideration of

Political Psychology Discuss How the Politics -
Words: 968 Length: 3 Document Type: Essay

Political Psychology Discuss how the politics - is - complicated that model is different from symbolic racism in terms of the outcomes these forms of racism produce. Use two examples to substantiate your arguments. In many democracies, one of the core principals is respecting the rights of everyone. This is in spite of race, income or ethnicity in determining opportunities and how an individual is living their life. On the surface, this

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now