Investment and Interest Rates Analysis
Added on 2020-04-01
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Running head:INVESTMENT MANAGEMENTInvestment ManagementUniversity NameStudent NameAuthors’ Note
2INVESTMENT MANAGEMENTTable of ContentsIntroduction................................................................................................................................2Research.....................................................................................................................................2Analysis......................................................................................................................................5Recommendation and Conclusion............................................................................................16References................................................................................................................................18
3INVESTMENT MANAGEMENTIntroduction The current study identifies and elucidates in detail the global fixed interest and shareinvestment opportunities with reference to 3 OECD member nations namely UK, UnitedStates and Netherlands. The present study explains in detail the performance of the equity aswell as fixed interest market over the last 10 years (2007-2016) enumerated by the respectivemarket indexes of three selected countries and compares the same with that of Australia.Thereafter, the study also evaluates the performance of each and every identified nation’sequity along with fixed interest markets, cites actual returns attained, economic performance(rate of growth, rate of inflation, rate of interest as well as movements of exchange rate) ofthe particular nations and the risks related to the investments. Research FTSE 100 Index can be considered to be one of the major indices of stock market that helpsin tracking the overall performance of approximately 100 capitalized corporations that areregularly traded on the London Stock Exchange. Prior reports show that the FTSE escalatedaround 38 points or else 0.52% to approximately 7253 on 18th September 2017 from the levelof 7215 recorded during the preceding trading session. However, analysis of historicalperformance reveals that the stock market Index of UK reached an all time high of nearly7547.63 recorded during the year 2017 and registered a record low of nearly 427.50 duringthe period February 1978 (Peppard and Ward 2016). The performance of the UK stockmarket can be considered to be quite strong but volatile at the same time during the past fewyears. However, larger corporations, especially the ones with transnational exposure haveessentially performed fine , whilst locally exposed small as well as medium sizedcorporations were weak amid concern over influence of the decision of the UK to leave theEuropean Union. Finances with a bias to higher level of risk, both small as well as medium
4INVESTMENT MANAGEMENTsized corporations thereby tended to underperform those concentrated on large as well asinternationally exposed operations. Overview of the market reflects the fact that theinvestment in the FTSE for approximately 10 years has happened to be a solid bet in the pastfew decades and there is 95% chance of making money in the market. Financiers would haveincurred lost in case if they purchased the dotcom boom during the first half of the year 1999and sold during depths of the financial crisis that incurred during the early period of 2009 asper analytical study of 10 year performance. It can be hereby said that FTSE 100 necessarilygenerated a mean 10 year return of approximately 70% (DeFusco et al. 2015).. The Dow Jones Industrial Average can be regarded to be one of the most carefully observedbenchmark indices of the nation U.S. This index is essentially a price weighted one thattracks the entire performance of around 30 large as well as well-known U.S corporations thatare mostly listed on particularly New York Stock Exchange. Essentially, the Dow JonesIndustrial Average particularly has a base of around 40.94 (Sullivan and Mackenzie 2017). Inparticular, Dow Jones augmented around 63 points or else 0.28% to approximately 22331recorded on 18th September in the year 2017 from the level of 22268 registered during theprevious session of trading. Analysis of historical performance reflects that the Dow JonesIndustrial Average reached the high level of approximately 22331.35 during the year 2017and a record low of nearly 41.20 during the period of July 1932. However, the actual data isregistered to be 22331.5, where previous figure is 22268.34, highest one is registered to be22331.35 and the lowest one is recorded to be 41.20 during the dates 1912 to 2017 where unitis represented in points and with daily frequency (Zhu 2014). AEX Index is a stock market index in Netherland that helps in tracking the overallperformance of different leading stocks that are traded particularly on the AmsterdamExchange. This is necessarily a free-float adjusted market capitalization weighted index andthat has a base value of around 538.36 registered during the year 1999 after alteration to
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