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How China's Stock Market Affects US Indexes

How China's Stock Market Affects US Indexes

The recent chaos in China's markets seem to have taken global centerstage. What does all this have to do with U.S. markets, and, more importantly, what should an individual investor do about all this? Simple - stay aware, but always take the long view. By Anna B. Wroblewska   Between plummeting oil prices, a Shanghai stock market that had to be shut down twice in as many days, and the worst start of a year in history for the S&P 500, it's been -- to put it mildly -- a bit of a January....more

Investing in Foreign Stocks at Home

Investing in Foreign Stocks at Home

Looking for a way to invest in specific foreign companies without learning all the intricacies of other country's stock markets? You may want to consider American depositary receipts (ADRs). ADRs are the form in which foreign stocks trade on U.S. stock exchanges. An ADR is a negotiable certificate issued by a U.S. bank (the depositary), representing shares of a foreign stock. The original foreign stock certificates are owned by the bank and held in the issuer's country. Each ADR can...more

Conquering Emerging Markets

Conquering Emerging Markets

Russia. India. China. Brazil. With their booming economies and stock market returns reminiscent of the late 90's, emerging markets have enormous appeal. The proliferation of single-country Exchange Traded Funds makes it easy to inexpensively buy into entire national markets, or even sub-sectors of markets, in one fell swoop. How to decide if, and where, to establish positions? First, make sure you don't stray from your overall asset allocation plan. Most diversified investors should have...more

Overseas Investing Makes Sense

Overseas Investing Makes Sense

There's an old cartoon that shows a U.S. map, with tugboats towing away several states. The caption goes something like this: 'The trade deficit' Oh, that's just for economists to talk about. It doesn't mean anything.? Twenty years later, economists are still talking about the trade deficit, which encompasses interest payments on debt and earnings on overseas investments as well as goods and services. To many, the trade deficit is a useful economic indicator and provides insight to the...more

Investing Internationally: A World of Opportunity

Investing Internationally: A World of Opportunity

Gerber, Lipton, Dr. Pepper, Bayer, Vaseline, Nestle, Frigidaire, Baby Ruth, & Burger King-these are just some of the brand-name products purchase by consumers in the United States every day. What they may not realize however is that all of these products are produced by companies located outside of the United States. Today there are just as many, if not more, investment opportunities available outside the United States than within our borders. What this means is that investors who limit...more

The Surge to Emerge

The Surge to Emerge

Emerging market stocks have performed poorly this year, but it's not time to write off this asset class just yet. Emerging market stocks still deserve an allocation in all but the most conservative, riskadverse investment portfolios. How bad is it? In 2004 through the end of August, the Vanguard Emerging Markets Stock Index Fund gained just 0.6%. Compare these results with 2003 when the fund surged 55%. The Emerging Markets Stock Index Fund is designed to match the performance of the...more

Are You Itching to Invest in China's Growth?

Are You Itching to Invest in China's Growth?

If you?ve been following the dynamics of global trade lately, the statistics suggest that China is leading the world as an exporter (seller) of goods and that the US is the world's largest consumer (importer). This isn't really new news, yet, if the direction of global capital flows represents a good indicator of economic growth opportunities, wouldn't this lead you to believe that investing in China makes a lot of sense? During this past month, I corresponded with my good friend and...more

Is China a Currency Play?

Is China a Currency Play?

Since the beginning of this decade, China's booming economy, fueled by large inflows of foreign direct investment (FDI) and rapid export growth, has emerged as a significant force in the global economy. In 2003, China surpassed the United States as the world's largest recipient of FDI, and its foreign exchange reserves surged to nearly UD$820 billion by the end of last year, second only to Japan. Both inward investment and export growth continues to create strong demand for...more

Should You Be Investing in Chinese Companies?

Should You Be Investing in Chinese Companies?

Few can deny that the growth potential of China is vast. The country's success is dazzling, investment inflows are huge, and the society is being transformed in a monumental economic achievement. Because of this, China's potential for investors appears significant, but the market poses a number of unique political and cultural risks. To better understand the China Machine, let us begin with a passage from the CIA World Fact-Book: ?For centuries China stood as a leading...more

Should You, Instead, Be Investing in China's Economic Growth?

Should You, Instead, Be Investing in China's Economic Growth?

China is the world's second largest economy on a purchasing power parity basis and is driven by a population of 1.3 billion people. And, it is estimated that China enjoys a household savings rate of more than 40%, one of the highest in the world. As incomes rise, newly empowered consumers represent an enormous market potential. For example, an estimated 4 million mobile phones are sold in China each month, the world's biggest market with nearly 250 million subscribers. ...more

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