Saturday 4 June 2011

Becoming Global

By Takara Alexis


China is making aggressive movements to one day compete with the U.S. in economic dominance on a global scale. According to U.S. News and World Report, in the year 2020, China's economy will pass Japan's to become the second largest in the world. Second, of course, only to the U.S. China's biggest industries include oil and petroleum, as well as telecommunications. And the country is home to a believed 2 million people who have a net worth of a least $40 million. That number is only expected to grow, and with it, so will chances for investment.

Diversification has long been a basic rule of thumb for investment. But there has never been such a wide range of opportunities for diversification outside of the U.S. and those opportunities seem to go up daily. China's experiment with capitalism means more and more opportunity for U.S. investors who wish to be apart of a rapidly growing and potentially flourishing worldwide market.

The world markets have not always done so well, and are often changeable, which is one more reason to keep a realistic balance within your portfolio between foreign and domestic holdings. But others recommend investing up to 20% or more of your portfolio in the worldwide markets to maximize diversification.

Diversification seeks to lower risk while maximizing returns by investing in dissimilar asset classes. It should be noted that this strategy doesn't prevent losses from occurring in a down market.

A great deal of the emerging markets success, many believe, can be attributed to restructuring by countries around the world. Most believe that Japan is expected to begin moving from a manufacturing economy to a service economy soon. Experts believe that the transition will possibly bring numerous opportunities for success, both in Japan and all over the globe.

As the world moves forward, economies are gradually shifting and constantly adapting. The ones that are doing it quickly and efficiently are looking at a great deal of success. Investing in global markets is not without risk. The volatility can be extreme at times. But that's why diversification is becoming such a popular investment plan.




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