Growth In Unrest Across The Globe Along With Outperformance Of Domestic Markets Is Causing American Advisors To Reign In International Investing Strategies

Tuesday, September 18, 2012 07:50
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Growth In Unrest Across The Globe Along With Outperformance Of Domestic Markets Is Causing American Advisors To Reign In International Investing Strategies

Tags: investment strategies | oil | world economy

Financial advisors are returning to domestic opportunities as the primary source for their investment strategies. The unrest sparked by the YouTube film inciting the jump in anti-American sentiment along with the economic uncertainty in Europe has many American advisors avoiding international investing with only a few exceptions.

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The US markets are the ones offering the best opportunities. Of all large global markets, the benchmark S&P 500 is the only index well within 10% of reaching its all-time high.
 
Ever since the Arab spring uprisings, investing in the Middle East has become a much riskier proposition. Unrest is typical in the Middle East, making it difficult to manage the risks. Traditionally, volatility in such oil-rich countries might be a good investment strategy but this time, energy-related proxies are declining—and declining substantially.
 
Fears of another world war are causing managers to rethink their investment positions.
 
Efforts to curb domestic drilling in the effort toward developing renewable energy may take a back seat if the Middle East begins to self-destruct and it becomes necessary for domestic oil production to increase.
 
The only exception might be Israel. It represents a developed market with a democratic society within an overall emerging markets backdrop.
 
Talk of another world war may be overblown but the fact is that unrest in the world is becoming more troublesome, especially in the Middle Eastern countries.
 
It will be an interesting scenario to watch, especially with the combination of revolution going on in the Middle East—with the hopes of instilling some type of democracy—simultaneously with the growth in anti-American sentiment.

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