By Thomas Kostigen
“Go West, young man,” is a popular phrase for people looking for opportunity. But many people may be looking east these days as Asian markets recover more quickly from the coronavirus shutdowns.
China attracted nearly two million new investors to its markets in the month of March. And while the Hang Seng Index is trading at record lows, financial analysts see this as a buying opportunity. In South Korea, also on the mend from the pandemic, retail investors are eager to get back into stocks. And in Singapore and Taiwan expectations are for a rebound. Indeed, the forecast for the Asian markets is upbeat as there is hope for a coronavirus treatment.
Meanwhile, the US and EU are just beginning efforts to reopen economies.
It’s always worth consulting a financial advisor to best chart an international course of investing. Still, some basic, primary research of one’s own is a good idea to figure whether following the sun is a wise investment strategy.
The US stock market is, of course, volatile with about as many analysts predicting a downward spike as there are predicting an upward bounce. Goldman Sachs last week said the worst of the market lows have been had. At the same time, other analysts warn against chasing gains.
Taking a step back, it’s worth self-evaluating the type of investor you are: global, domestic, or international. An international investor invests in securities outside the US. Global investors invest in securities both outside and inside the US. And domestic investors, of course, only invest in US-based securities.
America first is certainly not how the coronavirus took off, nor is it likely to be how or where the upswing in the investment markets will take place. To best “play” the reopening of world economies in the stock market, it’s likely going to take a global investors point of view—neither strictly US or ex-US. A global pandemic requires a global investment position.
There are numerous global funds and global exchange traded funds available that can give investors broader exposure to markets. To be sure, many investors remain bearish overall and throughout the world. That sentiment has pushed gold and funds that invest in gold and precious metals — a traditional stock market hedge — to all-time highs. Cash, of course, is the safest market hedge even though observers see that strategy as a mistake in the current market environment. “Long-term investors need to ride out the inevitable bear markets — as painful as they may be. That was the case in 2008. And 2000. And all previous bear markets before that. Rather than pulling money out of stocks during times of intense market drama, investors should buy the proverbial dips and increase their market exposure after particularly bad days on Wall Street,” CNN business reports.
Where investors buy those dips — in US stocks markets or abroad—and in which securities are the questions that need answering. As New York Times columnist Tom Friedman wrote, “the world is flat.” And that means spotting opportunities on the horizon line — both east and west.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.