News
Keep your investments secure in unstable conditions
25 January 2008
Many first time investors may feel uneasy about investing overseas, especially with the uncertainty of global financial markets and the talk of recession. In terms of economic trends, where the United States goes, the rest of the world inevitably follows. Just last week, we saw global share prices fall to their lowest point since 9/11. The US Federal reserve reacted by cutting interest rates by three quarters of a percent, which seems to have stabilised the situation. A tax rebate plan has also been passed by the US congress, increasing the spending power of US consumers. Currently, it seems that global financial markets have reacted well, making substantial gains across the board.
What does this say about international investments? Is it too risky to invest at the moment?
movewithus make sure that their investments are thoroughly vetted before they are presented to potential investors. Many developments like Alto Grande del Arte in Buenos Aires, Jardin de los Reyes in Spain and Villa del Mar in the Dominican Republic are designed with clear exit strategies to give investors the maximum amount of freedom to react to changing financial conditions. Also, many investors are discovering that arable land is a hidden gem. In the event that equity and property markets do slow, it is likely that demand for necessities like food will increase, with arable farmland owners profiting. This is due to a ‘hoard’ mentality, whereby consumers who stop spending money on luxuries will tend to ‘stock up’ on necessities.
Indeed, arable land owners have been described by some as the ‘oil barons of the future’ and stand to profit whichever way the global financial markets turn. As the GDPs of emerging economies like China and India rise, there is a greater demand for food. In China specifically, anticipated long-term economic expansion is six to eight percent annually. This will generate significant demand growth. Consumers in low-income countries spend much more of their income gains on food than in developed nations. This benefits the owners of arable land, used for the production of staples like rice and bread or for animal feed for the rearing of livestock. Also, due to international legislation like the Kyoto agreement and the global drive for alternatives to fossil fuels, demand is increasing for bio-fuels, benefiting land-owners who grow Soya. The best thing about investing in soft commodities is that it is a liquid market – whatever the conditions, there will always be opportunities to sell.
movewithus’ investor department undertake a tremendous amount of due diligence, including significant research into the implications of potential global financial crises on each development that we present. We are independent investment specialists and only recommend investments which we know our clients are likely to see returns on. Go to our investor page to find out more or make an enquiry.
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