CURRENT CONFUSION IN THE GLOBAL FINANCIAL MARKETS
With China set to increase the value of it’s currency, there seems to be a lot of confusion in the global financial markets. Increased currency valuation iin China ?! … When? By how much? How will this effect the US? The markets often act in irrational ways, although they are usually pretty efficient most of the time. Financial markets are ” man made ” and therefore prone to error, ” group think ” and investor psychology among other influences. As a result, it is important for investors in this ” new global economy ” to alter their investment strategies as and when needed.
Now more than ever, what is required includes: diversification of investments as well as portfolios, capital downside risk reduction as well as short term tactics including rotation ( cyclical ) investments. Adding to this tumult, global sovereign debt issues continues to shake the markets, especially in Greece. How bad is the situation in Greece? Are there other countries that might default? Will this set off a chain reaction of some kind? …….. Who knows? But what I do know is that there are always opportunities to be found it the global markets. It’s a matter of aggregating data, information, ideas and trends. Investors must have conviction in their ideas and strategies and also be patient; carefully judging the risk / reward ratios.
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