Wealth Creation In A Globalised Economic World
Thursday, July 29th, 2010Investments in an economy in a growing financial market benefit the investor as he gets a very good return on investment. However, in today’s globalised world, the growth is dispersed and not concentrated, which implies that places that have the money for investment usually lack the growth and vice versa – the trick is to make the high money markets meet the high growth markets. Therefore if one wants to have a slice of the pie, one should be willing to think beyond geographic boundaries. Economic growth today is accelerating in countries like China and India but the investors have the most money in US, Europe and Australia. Therefore if one truly wishes for a great return on investment, then developing countries is the place to be. A portfolio should contain funds that invest in these markets to ensure maximum returns. If one is unable to divert funds from a current portfolio, then a pay day loan can be taken for this investment.
Consider the immense potential of investing in these economies. The growth rate of China has been consistently over 10%. A good fund manager however can easily get at least twice the amount because he has the ability to pick up precisely the high growth industries and sectors in an economy. Thus the stocks picked by the fund manager are the cream of the economy that typically grow much faster than the average rate of growth of a country’s economy. There are mutual funds that invest directly in these markets and one can invest in them. Also, of late, there are a number of exchange traded funds that track major global indices. These exchange traded funds, also called ETFs, are highly convenient for small investors as they are bought and sold on the stock market just like ordinary stocks. However, their value depends on the underlying index that is being tracked. Therefore one can directly make money as a country like China progresses and develops.
Small investors are at times skeptic about these economies, but one needs to remember that the worst economic crisis that hit the world barely made a dent in the growth rates of the developing world. Therefore these markets are as safe as any other. Also, it is wise to remember that the developing economies have a greater degree of flexibility in the price movement and hence there are usually higher fluctuations in the market. Thus one should never buy or sell stocks in a state of panic. By exiting when the market is down, investors lose some great deals. It is best to invest in these markets from a long term perspective. In addition, the return on investment from these financial vehicles is usually much larger than the interest on a pay day loan, so one can safely opt for a loan for the sake of these investments.

