If you have just started your foray into the stock market, there are many nuances to investing and trading that you may be unfamiliar with. Overseas markets may be one such area that you are unsure of. If you want to better understand the overseas market, you must first know which countries are of particular interest. To learn about overseas markets and their effect on your investments, keep reading below.
What Are Overseas Markets?
Simply put, overseas markets are exactly what the name implies. They are the stock markets of countries outside of the United States, or foreign markets. Some experienced investors may have holdings abroad in good company names, but as a beginner investor, you probably do not. However, this does not mean they do not have an effect on you. That is why you should learn a bit more about the main international stock markets that can affect the performance of your investments in the United States.
China is one of the most important stock markets for any investor. Why? Because it is the second largest economy in the world. The state of China’s economy and stock market are huge indicators of the state of the manufacturing and services industries. Obviously, this can have an effect on holdings in these industries on Wall Street, as well. If you are starting to invest in the stock market, particularly in these areas, you may want to do some research on the current state of China, one of the largest foreign markets. This will take much more in-depth research than your average “oil change near me” search, but it will certainly pay off in the end.
If you are looking to invest overseas, you should definitely consider the Asian indexes. There a quite a number to consider. Asian indexes include the Australia ASX All Ordinaries, Shanghai SE Composite Index, Hang Seng, Mumbai Sensex, Nikkei 225 and the Taiwan TSEC 50 Index. You will, of course, want to consider all of these to determine which move is the best for your finances. Make sure to remember these indexes if you are looking to invest overseas in the future.
Another international market that can have a great impact on American investors is the United Kingdom stock market, or the FTSE 100. Even though the United Kingdom is no longer a part of the European Union, their market performance still greatly affects the American market because of the close ties the two share. Moreover, the UK is known for some of the top business schools in the world. While the EU markets are still largely important, it is crucial that you do not forget the influence the UK still has.
Japan is yet another global market that you will want to pay attention to. The Japan market index, Nikkei, can serve as an important benchmark for measuring consumer confidence and investor sentiment. This will help a savvy investor determine if a business loan with bad credit is a possibility. As a first time investor, you may not yet understand the ways in which international investor sentiment and consumer confidence can influence US stock market performance. However, it does have a great impact, so be sure to pay attention to the Japanese Nikkei indicator.
The final overseas market that we encourage you to pay attention to is that of France, the CAC 40. French banks posses bonds from other EU governments that are struggling to pay their bills, which inevitably has an impact on France’s economy. If international investors see that their government lacks financial stability, investor sentiment takes a tumble. That means fewer people buying and trading and more people selling, which is not good for any stock market, including the United States’. This might be a good way to invest $10 but not much more. Pay close attention to the stock performance of EU nations to inform your investment decisions in America.
If you are just starting to invest in the United States stock market, you may be overwhelmed by the idea of the overseas market, just as you would be regarding how difficult is CPA exam. However, it is crucial to successful investment strategies to inform your decisions based on the performance of international markets. Start by following news regarding the performance of these overseas markets. You may be shocked to see how much the American stock market is affected by global stock market performance.
Photo from http://www.imove.global/