Financial globalization is an aggregate concept that refers to increasing global linkages created through cross-border financial flows. Financial globalization can help developing countries to better manage output and consumption volatility. Indeed, a variety of theories imply that the volatility of consumption relative to that of output should decrease as the degree of financial integration increases; the essence of global financial diversification is that a country is able to shift some of its income risk to world markets. Since most developing countries are rather specialized in their output and factor endowment structures, they can, in theory, obtain even bigger gains than developed countries through international consumption risk sharing that is, by effectively selling off a stake in their domestic output in return for a stake in global output.
Financial globalization is thus far from complete. Although globalization of trade in goods and services is not controversial among economists polls of economists indicate that one of few things they do agree on is that globalization of international trade is desirable,4 financial globalization is highly controversial even among economists.
It has differential nature includes: Tremendous Heterogeneity in international financial, Extensive cross-border asset trade among advanced economies linkages, Financial Innovation (Securitization, Hedge Funds, SPVs …), and in case of developing countries, it has
Lower degree of participation in wave of financial innovation, Currency risk still a limiting factor, Improvement in net external position, Shift towards equity financing of liabilities (FDI, portfolio equity), Growth in gross foreign assets (but reserves largest component), And about drivers of globalization of markets include:
• Financial Development
• GDP per capita
• Country Size
• Capital Account Openness
• Euro / European integration process
• International Financial Centers
Recent political and economic developments and associated changes in the practice and delivery of health and social care have led managers and professionals to recognize the importance and links between problem solving and decision-making skills. In particular, assessing the impact of political, economic, socio-cultural, environmental and other external influences upon health care policy, proposals and organizational programs is becoming a recognizable stage of health service strategic development and planning mechanisms. Undertaking this form of strategic analysis therefore is to diagnose the key issues that the organization needs to address.
About political issues that include: Tax policy, and trade and tariff controls, Likely changes in the political environment, Government type and stability, and Social and employment legislation.
About economic issues: Current and project economic growth, inflation and interest rates, Unemployment and labor supply, Levels of disposable income and income distribution, disturbance of petroleum and oil gas prices, also disturbance of currency prices ( dollar ), and impact of globalization.
Concerning economic views connected to the main alternative political attitudes: conservative, progressive or reformist, revolutionary. This is a most complex relationship, and it is difficult, if not impossible, to reach clear-cut conclusions about it.
But markets are socio-political constructions. In the long run, their successful functioning depends on their legitimacy and support within civil society and that the welfare state might be important for the stability of an open international economy.
What are alternatives and potential solutions to the investors to alleviate the impact of the risks of the investment?
Strategy 1: Asset allocation
– Appropriate asset allocation that refers to the way you weight the investments in your portfolio to try to meet a specific objective — and it may be the single most important factor in the success of your portfolio.
Strategy 2: Portfolio diversification
Portfolio diversification is the process of selecting a variety of investments within each asset class to help reduce investment risk. Diversification across asset classes may also help lessen the impact of major market swings on your portfolio.
Strategy 3: Dollar-cost averaging
Dollar-cost averaging is a disciplined investment strategy that can help smooth out the effects of market fluctuations in your portfolio.
– Understand how to allocate investment capital prudently and how to measure and manage leverage so that you are not forced to make a bad decision due to a lack of liquidity.
– Only invest in companies when you can do so for a price much less than the value the firm will likely create.
– Understand what incoming information would materially change your estimate of a company’s value and how to incorporate that information into your valuation estimate.
– Understand how much value a company creates value for its owners now and its potential to create value in the future.
You can reduce the risk of investment in Qatari stock market through many steps:
– Buy only low value yet high potential stocks for long term gain.
– Access stock prices movements via computer terminals at any time.
– View our daily, weekly, monthly and yearly bulletin and publications on our website.
– See the overall index level, is it at peak point as compared to its previous history (two/three years ago. Do not investment if current level is higher and vice versa.
– Follow a disciplined investment approach.
-create abroad portfolio.
– Have realistic expectations.
– Invest only your surplus funds.
To sum up Continued globalization is inevitable and there are few industries, if any, untouched by global competitive forces. The secondhand clothing sold in Zambia, and the technical support call from Canada to a technician with a Canadian accent based in India are a profusion of buyers and sellers coming together regardless of distance or borders. While there surely will be some bumps along the road, further integration between people, countries, governments, cultures, and organizations is going to happen and every industry is going to be impacted.