faqs.org » Abstracts Index » Abstracts » Business

Are overseas shares doing their job?

Article Abstract:

Almost 300 billion pounds sterling work of foreign equities are owned by the UK. Some foreign markets can perform better than the UK but it is difficult to select the right markets, and the UK market may perform better than foreign markets as a whole. Diversification through investing in foreign stocks may not necessarily reduce risk since markets have tended to move together, especially when they are weak. Some analysts argue that correlations change over time and there has been a fashion for dismissing diversification linked to a strong performance of domestic stocks. International diversification may be a useful way of cutting risks.

Foreign investments, Economic aspects

---

Single-currency shock for shares

Article Abstract:

Equity markets may not benefit from planned European monetary Union (Emu). Bond yields could rise in the Netherlands and Germany, which could lead to lower share prices. Corporate earnings in countries that have seen devaluations could be affected by an end to currency depreciation, and this would affect Spain, the UK and Italy. Germany could benefit if the euro is weaker than the German mark, but French share prices are likely to suffer since bond yields are not likely to fall and French companies have had problems cutting costs.

Monetary unions

---

Some parts © 2012 Advameg, Inc.