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How Diversifying Can Help You Manage Market Mayhem (Continued from Prior Part) Geography
It’s natural to have a home-country bias, and the US is still one of the strongest markets in the world. But there’s no denying we live in a global economy. There can be real benefits to expanding your geographic horizon to pursue opportunities in other regions and countries. Try to have a risk-balanced blend of investments across developed and emerging markets so you’re well positioned globally. Also, keep in mind that the value of the dollar against other currencies has become more important to your bottom line lately. So consider whether some currency-hedged exchange-traded funds (or ETFs) may help to protect your portfolio against sudden changes.
Market Realist – You should pursue opportunities in other regions to improve your risk-return profile.
Diversifying your equity portfolio across various geographies and segments is important to improve your risk-return profile. Segments like emerging markets and frontier markets help you get access to higher growth, even though you take on higher risk.
The graph above shows the correlations of emerging markets (EEM), frontier markets (FM), the S&P 500 (SPY)(RSP), and developed markets outside North America (EFA) with one another considering weekly returns over the last five years.
The correlation between the S&P 500 and other developed markets is high at +0.86. The correlation between the former and emerging markets is lower at +0.75. The correlation between the S&P 500 and the frontier markets is even lower at +0.41. The correlation between emerging markets and frontier markets is relatively low at +0.54.
Since global markets are becoming more intertwined, correlations between various geographies are rising. However, they’re still low enough to give diversification benefits. If you only hold US stocks, it denies you of opportunities abroad.
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First Quantum Minerals Ltd.
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PRODUCER |
CODE : FM.TO |
ISIN : CA3359341052 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
First Quantum is a copper producing company based in Canada. First Quantum produces copper, cobalt and gold in Congo Dem. Rep. of, in Mauritania and in Zambia, develops cobalt, copper and nickel in Congo Dem. Rep. of and in Zambia, and holds various exploration projects in Congo Dem. Rep. of and in Peru. Its main assets in production are BWANA MKUBWA, KANSANSHI and MOPANI in Zambia, FRONTIER and KOLWEZI in Congo Dem. Rep. of and GUELB MOGHREIN in Mauritania, its main assets in development are KOLWESI MUSONOI in Congo Dem. Rep. of and KALUMBILA in Zambia and its main exploration properties are KEVITSA and KEVISTA in Finland, HAQUIRA EAST and CRISTO DE LOS ANDES in Peru and KIPUSHI in Congo Dem. Rep. of. First Quantum is listed in Canada, in Germany, in United Kingdom and in United States of America. Its market capitalisation is CA$ 10.0 billions as of today (US$ 8.0 billions, € 7.0 billions). Its stock quote reached its lowest recent point on November 02, 2001 at CA$ 0.38, and its highest recent level on March 28, 2024 at CA$ 14.56. First Quantum has 689 369 984 shares outstanding. |