Where in the World Can You Find Economic Opportunity?
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Where you live matters. If you are fortunate enough to be one of the four percent of the global population born in the US that puts you ahead of 93 percent of the rest of the world in the economic terms. Being a highly educated worker residing in one of America’s thriving cities means that you have more opportunities for economic success. Investors in US market can benefit from the resiliency of the US economy.
However, within the US, the recovery has been geographically uneven. Since the onset of the recovery, new business formation and job growth have been concentrated in about 20 countries out of more than 3000. Gains for most of America’s workers stagnated as jobs moved to more cost-effective areas of the globe, such as Asia and Latin America, contributing to higher growth rates in these parts of the world.
That has benefited workers in some of the poorest countries on the globe. Emerging economies have been growing faster as a group than developed economies have been growing faster as a group than developed economies, but most of their populations still subsist on a fraction of the income that most that most developed – market workers earn.
Global business likely will continue to take advantage of this disparity to reduce their cost of production and increase profits. For example Pakistan market has been on fire for the last few years. It has reacted new high Pakistan’s stock market has been the best more and more well established companies are investing in Pakistan. Look to fast food or other categories its booming.
Political Risk on the rise
The U.S. election was considered by some to be a protest against the effects pf globalization and income stagnation. And U.S. voters are not alone in their discontent. The UK vote to exit the European Union (EU) or “ Brexit” was an opportunity for British voters to express their displeasure with the perceived restrictions imposed by the EU. Italians, unwilling to support the change championed by their prime minister, rejected his reform ideas in late 2016, forcing his resignation. One developed market after another seems to be contending with the fallout of a divided recovery, at the same time that political risk is elevated in many major emerging markets.
The political landscape remains unsettled in 2017. Rising global political political tensions could lead to further market volatility, as policymakers appear willing to take on greater risk to promote higher growth rates.
Holding bonds and alternative investments with low net equity exposure as part of a well-diversified global portfolio could help to offset some of this risk. Rebalancing to long term target allocations when market dislocations occur is another way of investors to mitigate risk during volatile markets.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
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