Revealed: What financial globalisation means for your investments…
Fsp Invest, 15 Jan. 2014
Tags: financial globalisation, globalisation of financial markets, global economic activity, what financial market globalisation means for your investments, benefits of financial globalisation, negative impact of financial globalisation, investments
Economies all around the world are integrating with one another. This happens when goods, services and capital move across international borders. This is what we mean when we talk about the globalisation of financial markets. Today, we look at what it means for your investments.
The truth is, economists don’t understand the true impact of the globalisation of financial markets.
Let’s take a look at some of the implications of financial globalisation in closer detail.
Financial Globalisation: The Good, the Bad, and the Ugly
Some say financial globalisation amplifies shocks to global economic activity.
Think of the 1987 stock market crash and the more recent US sub-prime mortgage meltdown (2007-2009)…
While this is true, you shouldn’t look at the globalisation of financial markets in such a negative light.
In fact, the benefits of financial globalisation are many…
Notably, financial globalisation leads to a more comprehensive and liquid international market.
For YOU, this means you can more efficiently move your savings to the highest-yielding investments!
Is financial globalisation a good thing?
There is some good and some bad when it comes to financial globalisation. The problem is, when it goes badly, things get ugly fast.
Think of the 2008 financial crash…
So the only question remaining is:
Do the costs of financial globalisation outweigh the benefits?
In our opinion, only time will tell. But having strong financial institutions with sensible policies will help ward off some of the negative consequences.
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