July 23, 2007
How to Pick and Track Stocks In The International Markets
With global markets increasingly open to investors, and electronic media capable of providing up-to-the minute reports on what's happening around the world, investors appetites are being meet with a steady stream of information. The performances of 16 of the worlds major global stock exchanges are reported daily in the wall street journal.
The daily numbers on a particular exchange have meaning only in relation to what has happened on the exchange in the past. Take for example, the Nikkei index only reports what happened in that market; it is unrelated to Frankfurt's, Paris's, and Singapore's. the worldwide stock market performance can be compared by looking at the percentage change. Political and economic situations here at home have a major influence on stock performance, despite what's happening in the world at large.
Financial analysts tend to evaluate overseas markets from a top down perspective, focusing on a country's or a regions financial environment rather than the prospects of individual companies. Among the factors that make a country's stock look attractive to investors are the underlying strength and stability of economy, the value of its currency and its current interest rate.
Growing economies, strengthening currencies and flat or falling interest rates are good indicators of economic growth. Countries with currencies that are week, with high interest rates, and economies that are in recession don't tend to attract equity investors. The Wall Street Journal regularly tracks foreign markets in comparison with the Dow Jones Industrial Average.
Some of the most actively traded stocks on foreign exchanges are listed in the Foreign Markets column daily. Their closing prices and previous close are listed in local currency. many of the corporations whose stocks are listed in their home country's exchanges are also traded on U.S. exchanges or over-the-counter as ADRs or as U.S. subsidiary companies.
Since foreign market prices are quoted in different currencies and the markets are influenced by different forces, there's no easy formula to compare the yields on international investments. However the stock market performances around the globe are increasingly interrelated, so that a boom or bust in one market will affect what happens in all of the markets.






