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Lecture

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Department
Administrative Studies
Course
ADMS 4501
Professor
All Professors
Semester
Winter

Description
Advanced Portfolio Management ADMS 4501 – Winter 2012 – Lois King Lecture 1 Part 2 – Chapter 3 – Global Investing – Jan 5  Global Investment Opportunities ­ More investment instruments available in  the financial markets as a results of  technological advances and new regulations ­ Ability to invest from a global perspective thanks to the globalization or integration of  domestic and foreign financial markets ­ Investment vehicles with a variety of maturities, risk­return characteristics, and cash flow  patterns being spawned due to competition and deregulations in the financial sector The Case for Global Investment ­ Three reasons Canadian investors should think of constructing global investment  portfolios o Ignoring foreign markets can substantially reduce the investment choices for all  investors o Rates of return on foreign securities often  substantially exceed those on Canadian  investments o Low correlation between Canadian securities markets and many foreign markets  can help to substantially reduce portfolio risk ­ Relative Size of Financial Markets o Share of U.S. in world stock and bond markets has dropped from about 65% of  the total in 1969 to about 46% in 2006 o Growing importance of foreign securities in world capital markets is likely to  continue o Overall value of securities available in world capital market has increased from  $2.3 trillion in 1969 to $103 trillion in 2006 o U.S. portion has declined to less than half The Case for Global Investments: Diversification ­ Diversification with foreign securities can help reduce portfolio risk because foreign  markets have low correlation with Canadian capital markets.
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