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Foreign Investments and Portfolio Diversification

An assignment exploring international investments and portfolio strategies.

Christopher Lee
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Foreign Investments and Portfolio Diversification - Page 1 preview imageDr. BuellerForeign Investmentand PortfolioDiversificationReasons and RisksYour Name9/25/2015
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Foreign Investments and Portfolio Diversification - Page 2 preview image
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Foreign Investments and Portfolio Diversification - Page 3 preview imageFOREIGN INVESTMENTS2Table of ContentsForeign Investments and Portfolio Diversification....................................................................3Reasons to Invest Internationally...............................................................................................4Benefits of foreigninvestments for investors........................................................................4International Investment Risks..................................................................................................6International Investment Mediums............................................................................................7Conclusions................................................................................................................................9References................................................................................................................................10Word Count Requirement: 2000–2500 wordsAnalyzethe reasons and risks associated with foreign investment and portfoliodiversification. Discuss the benefits for investors, potential international investment risks, andvarious investment mediums available. Using real-world examples, evaluate how investorscan strategically diversify their portfolios to optimize returns while managing risks.
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Foreign Investments and Portfolio Diversification - Page 4 preview imageFOREIGN INVESTMENTS3Foreign Investments and Portfolio DiversificationThere has been a complete globalization over past couple of decades. The countriesacross the globe havebecome a small community. And there has been a free flow of men,material and money across the countries. There is a complete ease of access for investmentoptions for both corporate investors as well as individuals around the world.There have been situations in the past where some of the economies were facingeconomic crisis whereas others were going really strong. In such situation there is always abenefit in investing in the other countries, which are going strong.Like, current year has seenthe fall of many countries such as Greece.China,Ukraine and Iraq can also be added to thelist. America has also witnessed theninth worst stock market crash ever (of 530 points inAugust). On the other hand there are countries that are doing well economically; such asHong Kong, Singapore, Dutch Republic etc.The investors, in order toallocate their funds more efficiently and to obtain the bestreturns on their investment at the least possible level of risk; make investments in diversifiedportfolios. A diversified portfolio includes investments across both domestic as well asinternational enterprises.A proper diversification can be attained by putting moneyacrossdifferent countries that are performing well despiterecession.This way the investors can alsoreap the best possible returns. Alsoa quest for the “best price” in global market throughvarious tools and techniques haslead to search forglobal investment options, amongst thefinance managers.There are many investment options available withthe foreign investors, such as:corporate investments, foreign stocks, GDR’s, bonds, FCCB’s etc.
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Finance

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