Global Macro Investing
- Topics:
- Commercial Lending
- Tags:
- Bond,
- Finance,
- Financial Planning,
- Financial Services,
- Interest Rate,
- Investment,
- Macro Event,
- Magnum Global Investments
- Source:
- Magnum Global Investments
FREE Registration is required
Overview: The conventional approach to buying stocks and bonds is to study companies and industries and base investment decisions on fundamentals such as quality of management, strategy, competition, market share, company profits, and P/E ratios. A less conventional and more challenging approach is to make investments based not on these "micro events" affecting companies but on macro events. Macro events are changes in global economies, typically brought about by shifts in government policy which impact interest rates, which, in turn affect all financial instruments, including currency, stock, and bond markets. Macro investing is perhaps the most publicized of hedge fund strategies, even though only a small percentage of hedge funds are macro funds. The article informs that as developing countries' credit ratings typically lag behind fundamental improvements in their economic performance, risk premiums in the form of relatively higher interest rates, even on dollar-denominated obligations, regularly exist in these countries' capital markets. Similarly, even the healthiest developing countries regularly experience capital shortages and, in turn, high interest rates due to their rapid growth.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: HTML | Date: Jan 2003 | Pages: 1
