Are Global Investments a Good Idea?

Global Investment

Is it worth it to get involved with global investments? A very compelling reason to go for it is the potential for higher returns unrelated to the returns on US investments. Having a broader portfolio gives you more options, particularly in tumultuous economic times (think Greece’s current financial woes). However, it’s important to consider your risk tolerance and how much of your portfolio you’re willing to diversify in this way.

It’s also key to work with a solid investment firm. Groups like J.C. Flowers & Co., with a long history of working within the global financial services industry and a wide network of contacts, can ensure your personal and business investments are made wisely.

According to experts, the biggest draw for global investments is the potential for higher returns. Because global investments are uncorrelated to returns on US investments, they can potentially offer bigger rewards. For example, in May 2014, Ukraine offered one-year CDs with a 19.00% APY—a far better deal than what was being offered in the US at the time.

But there’s a downside as well: investments in other countries are generally not as stable as those made in US dollars. Whether it’s an economic downturn or political upheaval, there are factors at play in global investments that could lead to investors losing rather than gaining money, which is bad both for individual investors and larger corporations.

The key for anyone interested in global investments is to consider your own risk tolerance and what sort of portfolio makes sense in your situation. It’s also important to note that different approaches could be required depending on your goals. Fidelity recommends a balanced portfolio including allocating 15% to international equities; however, if the investor is interested in more aggressive growth, Fidelity’s recommendation for international equity investments goes up to 26%.

In the end, while global investments can be uncertain, they can also help support a portfolio and protect it against potentially fatal market fluctuations. So long as you have your goals in mind and some expert advice, it could be an appropriate investment for yourself or your business.


About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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