Should We Really be in Love With International Stocks and Emerging Markets?
As in everything in life there are always pros and cons. Investors in the BRICs ( Brazil-Russia-India-China) are sitting with huge open trade profits. One can easily look at the enhanced return one would have received this year if they had purchased virtually anything that was based in the Euro currency. They would have earned for themselves an additional 12% just because of the currency. Not bad huh! But what would have happened if the US dollar that everyone seems to hate from beautiful models to rappers and other Harvard graduates does something that no one expects…it strengthens??? As a long time investor as well as a contrarian, I believe anything can happen, I prepare for that and know that in most cases the crowd is wrong. It seems that many investors have let the weak dollar dictate their investment strategy. Depending on the country, currency or the timing, risks can amplify as a pose to being diminished. One needs to be aware that currency risk can erode returns as well. A very important fact it is very hard to hedge currency risk.
Many international markets have produced higher average returns granted but also with much higher volatility. One example is TRF – Templeton Russia Fund.
The Templeton Russia Fund went from in 1996 from approx $12 to a high of $65 in mid 1997…then crashing back down to below $10 in Oct of 1998 with the Russian Debt crisis & emerging market meltdown. Wouldn’t it have been nice to purchase somewhere near the lows with diminished risk. What transpired in Russia is common to many emerging markets. High returns –High volatility. My suggestion as a pose to try to chase returns as so many has done with the BRICs (Brazil- Russia-India-China) wait until there is a correction. Wait to buy value. Your risk will be vastly diminished and your returns potentially greatly enhanced. Market history is full of past situations that patient investors have made tremendous returns. One can look at Korea. From the lows in 2001 one could have 7 times their money or TRF (Templeton Russia Fund) almost 10 times. My perspective is to be a value investor (as well at times is a trader). In this fashion one mitigates the risks and opens oneself for extra-ordinary returns. Historically too many times emerging markets haven risen parabolic ally and crashed back down destroying accounts.
Another thought one might consider in regard to International investing is the fact that many US companies such as McDonalds, Proctor & Gamble, Nike, GE, Alteria and many more have exposure to both emerging markets & mature markets. They can fill the niche of international investments. As well for better or worse they are denominated in US dollars which give stability. Again however as a value investor many of the US consumer conglomerates are not at Warren Buffet type of prices. Have a plan and do not chase high risk ideas. Andrew Abraham andrabr9@gmail.comHttp:/www.AbrahamBedick.comHttp://capitalinvestor1836.blogspot.com/
About the Author
Andrew has been in the financial arena since 1990. He is a Registered Investment Advisor and affiliate of Abraham Bedick Capital located in Fort Lauderdale Florida. He has been a speaker at investment conferences, a frequent market commentator for investment publications and author of numerous investment articles.
How To Read The Stock Market Tables Like a Pro
Stock market news is all around us everyday in different forms. It's on TV, it's on ticker tapes in front of financial buildings, it's in the newspaper in the form of stock tables and it's on the internet. So how do you make sense of the all the financial data coming from these resources? Learning how to read the stock market is an essential requirement for becoming a successful stock market investor.Here are the basics you need to know to read stock market data How to Read the Stock Market Tables Open any newspaper to the financial section and you'll see a table full of numbers, arrows and letters. This is usually a stock table and it encapsulates the stock market's performance for that day as well as gives you past data for comparative analysis. Although every paper's stock tables might be slightly different, in general, they all contain the same basic info. Here's how to read the stock market table: 52 week high: This figure gives you the highest price for a particular stock in the last 52 weeks. It's crucial to be able to determine the performance of a stock over time and analyze trends. 52 week low: This figure will give you the lowest price for a stock in the last 52 weeks (nearly a year). It's also crucial for evaluating trends and performance. When combined with the 52-week high figure, it should give you an accurate assessment of the stock's yearly performance. Name/Symbol: This column contains both the company name and its stock symbol. A stock symbol is usually a 3-letter symbol used to identify the company in the stock market. You need to know the stock symbol of any companies you invest in so you can track their performance over time and also when you use the internet to find stock quotes. Companies often pick memorable ticker symbols, so for example, Genentech, a biotechnology firm, has the stock symbol DNA. Dividend: The amount paid on an annual basis by a company as profit to its shareholders. Volume: The number of shares traded today for a particular stock. Yield: Yield is a percentage calculated as dividend divided by stock price; the yield of a particular stock may change on a daily basis depending on its stock price for that day. P/E Ratio: This ratio is simply the price of stock divided by the company's earnings per share. In general a lower P/E ratio is desirable because it would mean that the company is a good value investment for the current price. Day Last: This would be today's stock price, or whenever the stock last traded on a business day. Net Change: The net change measures the differential in the stock price between its current price and the price the day before, and reports the change as a percentage. How to Read the Stock Market Ticker Tape The stock market ticker tape runs on TV channels, as well as outside financial buildings and the Internet. It's usually a quick glance at how various stocks are performing on the current day. It denotes stocks by their symbol, which can be anywhere from one to four letters. Some companies abbreviate their business name, so Google's symbol is GOOG, while other companies use their entire name, such as NIKE. The ticker generally also shows either a green arrow, indicating increase in stock price, or a red arrow indicating a decrease in stock price followed by a percentage figure denoting the amount of change in stock price for the day's trading. Both stock tables and stock tickers are helpful for an investor to monitor and track stock performance. Knowing how to read the stock market is crucial for any investor because stock investing is all about making and then monitoring your investment so you can tweak your stock portfolio to optimal market conditions.
About the Author
Kelly Clifford from StockMarketsMadeSimple.com has put together a complimentary report titled "Stock Market Basics: A Beginners Guide To Understanding The Stock Market" that will likely prove invaluable in putting you on the fast track to becoming a knowledgable and successful Stock Market investor. To download your copy now instantly.. visit http://www.stockmarketsmadesimple.com/index.php
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