Global effects on investment markets have become more powerful over the last decade because of technological improvements, the globalisation of businesses and the economic unions between countries.
The global financial crisis is a perfect example of how interconnected world investment markets are now. This is not necessarily something to be afraid
of: there are many opportunities as well as dangers.
There are five good reasons why it makes sense to invest offshore now:
New Zealand is a very small part of the global economy and investing in one very tiny market makes little sense when you take a global view.
Diversification is a good reason to invest offshore. The impacts of natural disasters and adverse economic events can be lessened by spreading investments far and wide.
In the medium term, it is known that global growth will be driven by emerging economies like China and India, not by the developed world. Leave these countries out of your investment portfolio and you will miss out on opportunities for good returns.
The New Zealand economic outlook is uncertain following the Christchurch earthquake. In the short term at least, the earthquake is likely to have a negative impact. Economic growth will be dependent on exports and business investment.
Our exchange rate is at a historic high point in relation to the currencies of our major trading partners. Investors placing funds offshore now will not only get more for their money, but they will stand to gain again when the exchange rate drops as it inevitably will.
It is easy to invest offshore through managed funds, using the expertise of fund managers who understand the markets they invest in.
Overall, investing offshore opens up opportunities for increased returns and reduced risk.
Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847 begin_of_the_skype_highlighting 0800 273 847 end_of_the_skype_highlighting.
www.moneymaxcoach.com
