Global Markets: Investment Rules

There are many investors who want to expand their portfolios by investing in global markets as there is a huge potential for growth in emerging markets. Many investors, however, have difficulty in accessing a suitable platform for trading in global markets. One way that you can do so is to find a really good CFD provider who offers trades in CFDs based on financial securities across the globe. The decision to invest in global markets should be based on sound economic sense. One of the mistakes that investors tend to make is to get lured by high GDP growth rates revealed by emerging markets. A healthy GDP growth is a genuine indicator of the growth of an economy but the same cannot be said for stock market returns. It makes good sense to bet on the strength of a country’s currency on the base of its growth rates, but stock trading is a different ball game altogether.

When you buy stocks in global markets the performance of individual companies is of greater importance, just as it is in the case of investing in domestic stocks. For that purpose, investors need to study the fundamentals of the company and the general direction in which the country’s stock market is headed for.

Markets all over the world are the same; so are the basic investment rules. It is entirely your choice which of the two rules, fundamental or technical analysis, you choose for making investment decisions regardless of whether you are putting you money in domestic or global markets. However, invest on the basis of technical analysis if you have a short time horizon. But if you have a long term perspective, it would be wise to stick to fundamentals.