Tips for International Investment Strategy

Tips For International Investment Strategy

The first and most important strategy in international investment is diversity.
In reality, this is the quintessential strategy in any kind of investment.
Why? Because it is too risky to put all your money into one project. Even if
you are completely sure that it will work.

Remember that it is impossible to determine what will happen in the future.
Your plan can go down the chute if there is a coup (which just happened in
Thailand) or the government decides to nationalize determined resources
(for example, Bolivia).

The second most important tip in international investment is to make a
proper research on the sociopolitical conditions of the region. The last thing
that you want to do is to invest thousands of dollars in an unstable territory,
where it can be a victim of terrorism, sabotage attacks by the local
population, theft or even occasional visits by the local mob or warlord.
Those scenarios aren't the ones that should interest you.

Another important tip is to maintain updated on the up's and down's that
happen around the world. This may have not been easy fifteen years ago,
but now, thanks to the presence of the Internet, you can know what is
happening at New Delhi, Buenos Aires, or Kyoto. All with the clicks of a few
buttons. This is the first time in the history of mankind that we can do this
kind of things.

A good international investment strategy plan requires some time. It isn't as
easy as applying all of the tips mentioned above and expects that things
may go ok. It is necessary to understand the world of geopolitics and global
economy. Even if you choose passive investment strategies, it is still a
good idea to maintain yourself informed. After all, in the 21st century,
information is the real source of all power.
International Investment
Strategies
With so much volatility in the market at present, Chris Vellacott says you pays your
money and takes your choice autumn is definitely in the air and stock markets
around the world have entered their habitual annual selling frenzy. History¶s most
painful equity market crashes, such as those of 1929 and 1987, all took place
around this time of year.
In 1997, the Asian crisis, which started with currency devaluation in Thailand the
previous summer, was gathering momentum and markets elsewhere started to feel
the hurt.
The following year, the problem was no longer confined to a single region and
Russia had defaulted on its debt repayments. Once again, markets went into
freefall.
Although October 1999 passed without incident, this year has seen a return to the
old pattern. An oil crisis exacerbated by trouble in the Middle East has eerie echoes
of the cruel recession endured by many in the 1970s and, as a result, the markets
are nervous.
International Investment Strategies & Selling
Pressure
But there is another factor which has contributed to recent selling pressure, which
has little to do with oil prices or inflation.
The world still cannot seem to make up its mind about the technology sector. Early
in the year, people just could not buy technology shares fast enough and venture
capitalists were eager to throw millions at every clever -sounding internet start up.
When companies such as lastminute.com in the UK floated, shares were massively
oversubscribed and its founders became overnight millionaires.
The other TMTs, namely media and telecommunications, were also caught up in the
boom on the grounds that they were poised to benefi t from the much heralded
internet revolution.
International Investment Strategies & TMT
In March of this year the bubble burst and there was a massive TMT sell off around
the world. The technology-based Nasdaq index, by mid-April, had fallen as much as
27 per cent from the year¶s highs the previous month. The slump was followed by a
partial recovery, but volatility has characterized the sector ever since.
In late summer, there was much talk about the US economy heading for its much
heralded soft landing. The US Federal Reserve seemed to have done a good job of
choosing monetary policy and people were confident we would not see a repeat of
the recession of the early 1990s.
Investors again became more inclined towards higher risk within their portfolios
and many were persuaded to have a second flutter with TMT stocks. The Nasdaq
started a shaky climb in August, but early September again saw the start of a
wholesale sell off by investors disillusioned with the sector. In mid-October, Japan¶s
technology sensitive Nikkei index fell below the psychologically important 15,000
level for the first time in 19 months.
International Investment Strategies & IBM
This second technology rout was partly due to profit warnings from the likes of IBM
and Intel, the microprocessor manufacturer. Both corporations blamed poor
performances on a persistently weak euro, which is damaging sales on this side of
the Atlantic.
Market pundits have begun to speculate whether this really is the lo ng-awaited
technology shakeout. The optimists hope that markets will bottom out soon and
investors will be free to start playing a high-quality technology sector finally cleared
of trash.
International Investment
Strategies
In finance, an investment strategy is a set of rules, behaviors or procedures, designed to
guide an investor's selection of an investment portfolio. Usually the strategy will be designed
around the investor's risk -return tradeoff: some investors will prefer to maximize expected
returns by investing in risky assets, others will prefer to minimize risk, but most will select a
strategy somewhere in between.
Passive strategies are often used to minimize transaction costs, and active strategies such
as market timing are an attempt to maximize returns.
One of the better known investment strategies is buy and hold. Buy and hold is a long
term investment strategy, based on the concept that in the long run equity markets give a good
rate of return despite periods of volatility or decline. A purely passive variant of this strategy is
indexing where an investor buys a small proportion of all the shares in a market index such as
the S&P 500, or more likely, in a mutual fund called an index fund or an exchange-traded
fund (ETF).
This viewpoint also holds that market timing, that one can enter the market on the lows and sell
on the highs, does not work or does not work for small investors, so it is better to simply buy and
hold. The smaller, retail investor more typically uses the buy and hold investment strategy in
real estate investment where the holding period is typically the lifespan of their mortgage.
Investment strategy


An investor's plan of distributing assets among various
investments, taking into consideration such factors as
individual goals, risk tolerance and horizon.

An lnvestment strutegy ls un upprouch to chooslng lnvestments. Thls cun ulso be
culled un lnvestment style. Dlfferent lnvestment strut egles reflect lnvestors'
vurylng ob|ectlves, tlme scules und rlsk tolerunce.
In some flnunclul economlcs contexts "lnvestment strutegy" ls used to meun u
cholce of lnvestments. Thls usuge ls synonymous wlth the word portfollo.
Funds mundutes usuully speclfy u style, und prlvute lnvestors ure often udvlsed to
mulntuln u conslstent style. However, ln both cuses, style drlft ls u hurd temptutlon
to reslst.
The commonest strutegles ure growth und vulue lnvestlng. The former focuses on
plcklng compunles wlth opportunltles to grow ln the long term, whe reus the lutter
prefers compunles thut ure undervulued relutlve to thelr present proflts or cush
flows.
Becuuse compunles wlth strong cush flows ure ulso those uble to puy hlgh
dlvldends, lnvestors looklng for un lmmedlute lncome tend to use some form of
vulue lnvestlng.
Another common strutegy, often used unwlttlngly, ls momentum lnvestlng: buylng
whutever ls golng up, selllng whutever ls golng down. The dunger ls thut lt leuds
lnvestors lnto buylng ulreudy overvulued shures und selllng burgulns. Momentum
lnvestors drlve bubbles und crushes. It cun be useful ln con|unctlon wlth unother
strutegy us lt help lnvestors tlme declslons, so thut they buy or sell when the
murket ls movlng ln thelr dlrectlon.
Contrurlun lnvestlng ls the opposlte of momentum lnvestlng, dolng the opposlte of
whut other lnvestors do. A contrurlun would buy on u slump und sell ln u boom,
und would look to buy out of fuvour stocks und sell those thut huve rlsen shurply.
It ls ulso worth conslderlng belng contrurlun on strutegy: ut tlmes when everyone
wunts growth stocks you ure more llkely to be uble to flnd opportunltles ln vulue
stocks und vlce-versu.
There ure ulso muny mechunlcul stock plcklng strutegles , und eluborute
technlques bused on prlce churts. There ls no evldence thut "technlcul
unulysls" works. If lt does work lt should be posslble to show stutlstlcul evldence
for lt.
2ther mechunlcul strutegles runge from the very slmple to the very complex.
Aguln there ls very llttle evldence thut these strutegles cun ullow you to perform
better thun the murket (or un l ndex fund) would huve done, but for those wlth
lurge portfollos lt muy be cheuper.
2ne of the most lnterestlng mechunlcul strutegles ls the Dogs of the
Dow (together wlth vurlunts of lt). It ls ulso one of the slmplest und cheupest.
There ure ulso muny short-term trudlng strutegles. These tend to be hlgh rlsk
requlre u lot of work. Aggresslve trudlng, und duy trudlng ln purtlculur hus mude
muny people rlch դ lt hus ulso rulned muny people. For the vust mu|orlty of
people one or unother buy und hold strutegy ls best.
What Does Investment Strategy Mean?
An investor's plan of attack to guide their investment decisions based
on individual goals, risk tolerance and future needs for capital. The
components of most investment strategies include asset allocation, buy
and sell guidelines, and risk guidelines.

Investopedia explains Investment Strategy
Investment strategies can differ greatly from a rapid growth strategy where
an investor focuses on capital appreciation to a safety strategy where the
focus is on wealth protection. The most important part of an investment
strategy is that it aligns with the individual's goals and is closely followed by
the investor.