As the APAC region grows in size and economic influence, many investors are now reviewing their global investment strategy. While worldwide indices allocate weightings to specific areas, it is essential to try and appreciate the enormous range of asset classes and potential in different regions. Then there is the issue of risk and reward, aligning this to your investment strategy and long-term goals.


Determine Investment Objectives


It is crucial to identify your short, medium and long-term investment objectives before creating a global investment strategy. This will involve your attitude to risk as well as being aware that your strategy may change over time.


Global Economic Trends


Once you look outside your domestic market, you will notice that the global economy is fluid, often fast-moving, which can impact each country's weighting. As a result, there are numerous issues to consider when looking at a global investment strategy, including interest rates, inflation and GDP. For example, interest rate decisions taken by the US Federal Reserve will impact the global market.


Diversification across Asset Classes/Regions


While it is essential not to diversify just for the sake of it, it is crucial to utilise the different asset classes and returns achieved in other countries. Your global investment strategywill likely take in stocks and bonds with direct/indirect investment in real estate. Then we have exposure to individual countries, which will reduce your dependence on a particular country. This is where it gets challenging!


Currency Risk


Currency risk is an element of your global investment strategythat is often overlooked but relatively easily controlled. Whether you invest in collective investment funds or directly in stocks, shares and other assets, you can hedge any potential currency risk using foreign exchange markets. Once you begin researching hedging, you will realise it is easier than it may sound.


Regulatory and Political Environment


Unfortunately, global investment plans will need to consider regulatory and political issues in your home country and those in which you are looking to invest. Therefore, when creating a global investment strategy, you mustn't automatically assume that every other country operates by the same rules and regulations as your home country. If you do, you will be in for a severe shock!




In the future, we will look at the issues above in more detail, but at this point, it is vital to have a general understanding of them. It is also important to remember that any global investment strategy is not set in stone (and should never be)with regular adjustments commonplace. Therefore, instead of following the herd, it is advisable to research individual asset classes and their place in respective countries when scoping out your global investment plans. 

Many people seek to achieve global investment weightings via collective investment funds or ETFs. However, for those who prefer to be more hands-on and have the time to monitor their investment, technological developments mean that it is possible to deal in most markets with an online account. Historically, a global investment strategy was seen as something for international collective funds and high-net-worth individuals, but it is now achievable for private investors.

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