International Financial Markets Summer
Term Project Assignment: Scenario 1
You are employed by a relatively small company and although your boss asked you to pick two US MNCs and two foreign stocks, he has already become concerned about international investments. He has asked you to explain why investing internationally using a mix of MNCs and foreign firms is a good idea when the US stock market is doing so well at the current time. Note: Your boss is not an expert in international finance and therefore it is up to you to provide an explanation that provides sufficient background for him/her to understand, while keeping it in language that he/she will easily understand. The key to a good explanation is making it clear to the reader.
To remove his fears please explain to him why you believe international investing:
- Provides better returns than domestic investing
- Diversifies risks
- Enables you to indirectly participate in the growth of international markets as foreign MNCs and markets (London, Frankfurt, Tokyo, Shanghai,etc.) may leading or lagging indicators are at different stages of their business and product life cycles.
- Provides you an investment option less risky and costly than launching a Foreign Direct Investment.
- Presents you as a 21st century investor who invests where to opportunities are within a risk-appropriate environment.
- Present additional reasons that support an internationally diversifies investment strategy.
Prepare your explanation (500 words or less), double spaced, 12 point font, using MS Word and submit to the Term Project DropBox.
Reinhard Janson
June 2, 2016