Becoming Global

Becoming Global
by Takara Alexis

China is making aggressive actions to perhaps battle the U.S. in economic dominance on a global scale. According to U.S. News and World Report, in the year 2020, China's economy will pass Japan's to become the second largest in the world. Second, of course, only to the U.S. China's leading industries include petroleum and oil, as well as telecommunications. And the country is home to an estimated 2 million people who have a net worth of a least $40 million. That amount is only expected to expand, as well as opportunities for investment.

Diversification has long been a basic rule of thumb for investment. But never before has there been such a large range of chances for diversification outside of the U.S. and those opportunities only seem to increase on a daily basis. China's experiment with capitalism means more and more opportunity for U.S. investors who wish to tap into an ever-growing and possibly very productive worldwide market.

The world markets have not always done so well, and are often changeable, which is one more reason to keep a realistic balance within your portfolio between foreign and domestic holdings. But others recommend investing up to 20% or more of your portfolio in the worldwide markets to maximize diversification.

Diversification looks to reduce risk while maximizing returns by investing in dissimilar asset classes. It should be noted that this method does not prevent losses from occurring in a down market.

Much of the emerging markets success, experts believe, can be attributed to restructuring by countries all over the world. Many believe that Japan is expected to start moving from a manufacturing economy to a service economy soon. Experts believe that this transition will bring many potential chances for success, both in Japan and across the globe.

As the world moves forward, economies are steadily changing and always adapting. The ones that are doing it quickly and efficiently are seeing a great deal of success. Investing in global markets is not without risk. The unpredictability can be a bit much at times. But that's why diversification has become such a popular investment strategy.

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