In 2011, it was found that 10% of rice produced in China was contaminated by heavy metals. In the same year, evidence surfaced that one third of dumplings and steamed buns contained dangerous levels of…
Why limit your focus to Australia when there’s so much wealth created in world markets?
Gone are the days when you were restricted to Australia’s dominant industries of finance and natural resources. Investors now have access to an incredible number of overseas markets and exchanges with plenty of financial products.
The globalisation of world markets
The global market can be imagined as a series of interconnected financial transactions. This globalised economy brings significant opportunities (and risks) for Australian investors.
As a capital-hungry nation with a small population, Australia relies on other world markets to fill the gap in terms of savings. Foreign investment can help the Australian economy in the long term by investing in new and established industries — boosting infrastructure and providing new employment opportunities.
This increase in investments has a flow-on effect for domestic services at a community level, by increasing the amount of money going to essential services like health and education.
In turn, access to foreign markets can diversify Australian investors’ portfolios, and give you access to industries that don’t exist here. Foreign investments can also add value to your portfolio in times of strife. A falling local market could be negated by rising value in your shares overseas, and vice versa.
Access to emerging markets and developing countries is also helping stimulate global growth and wealth. It won’t be long until upcomers like China and India will have control of the majority of manufacturing services. Early investors could see significant gains from these rising economic powers.
Although these benefits do not necessarily outweigh the risks in foreign investment. Developing economies are particularly vulnerable to financial and political instability. And as we have previously seen, the globalisation of markets can lead to risk ‘contagion’.
Any shock to the US market can send larger shockwaves through world markets. This is particularly noticeable in Australia, which so heavily relies on the US and China as trade partners.
The GFC demonstrated how quickly an interconnected global economy can lead to calamity, and many Australian investors are hesitant to risk international investments, especially after being hit by fluctuations in the exchange rate.
Nevertheless, for those interested in investing elsewhere, the options overseas are potentially limitless.
To find out more about opportunities within world markets, see our latest market news and analysis below.
When the Australian government opened the floodgates for medical cannabis it set off a huge investment opportunity. Companies like AusCann [ASX:AC8] and Cann Group [ASX:CAN] have already been huge winners for investors. And we know…
On Thursday, Facebook posted the largest one-day loss in market value by any company in US stock market history. Their market capitalisation dropped by $119 billion, falling to $510 billion, while their stock price plummeted…
Stocks rebounded nicely on Monday, despite the burgeoning trade war between the US and China. Nothing’s changed on that front. But no news was apparently good enough for a market bounce.
The World Cup is also one of the biggest betting events. Who will win it? Belgium? France? England? Croatia? Well, anything can happen, particularly in this World Cup which has defied odds from the beginning.
As you may remember, the US recently imposed steel and aluminium tariffs on trading partners Mexico, Canada and the European Union (EU).
Typically, a market crash happens at the worst possible moment…when prices are still near a peak…and when ‘nobody could have seen it coming’.
The markets keep reacting to the escalations in trade tensions. People keep reacting to the no-tolerance policies on immigration, separating children from their parents.
You probably still remember the market correction from back in February. Funnily enough though what rattled the markets back then wasn’t bad news…but good news.
Deutsche Bank is the most obvious sign of how challenging the bad debt situation still is in the Eurozone, with Italy, alone, housing 40% of the non-performing loans.
Last week, US President Donald Trump passed a 25% tariff on US$ 50 billion worth of Chinese goods. He has threatened to impose more tariffs if China retaliates…So China retaliated.
Well, it looks like we were wrong about everything. Everything. The Fed. Donald J Trump. The stock market. The economy. Even the weather.
Foreign investment remains a contentious issue. CKI Group’s latest bid might once again come into the national spotlight. But what is it that international investors see that local investors don’t?
Free market capitalism requires that markets are fair, and losses accrue to those that take the risks in return for higher rewards. Not anymore!