Essay Example on Only a year back the European economies were Struggling









Only a year back the European economies were struggling in an attempt to develop lingering behind the US and UK Even in such a scenario many financial commentators were urging investors to look for the turnaround potential that Europe had and stating that good organizations were being overlooked because of fears regarding the political upheaval and negativity about the economy In the year 2016 around 100 billion was pulled from European equities and private investors start selling them in the first few months However the institutions started piling them back in The European markets started rallying strongly as the fear of win for the far right in countries like France and Netherlands proved to be unwarranted and the growth increased In the year following the UK referendum on the European Union membership European equities were amongst the best performing assets lagging just slightly behind Asia Pacific and the emerging market equities The two greatest European equity ETFs exchange traded funds showed gains of around 18 while the German small cap exchange traded fund was up more than 28 in 2017 Boosted by an increased trust in the EU small investors have started returning to Europe This trust and confidence in Europe is being driven by the German chancellor Angela Merkel along with Emmanuel Macron the president of France Strong gains were spurred for the FTSE 100 after the fall in sterling because of the EU referendum dominated by organizations with high overseas income 

Smaller companies in UK which had been initially sold off appeared to bounce back higher than the bigger companies Small caps are dependent mainly on the domestic economy and are not exposed to European trade although this sector has a considerable populace of investment trusts which have overseas exposure The sterling is expected to rise once the Brexit anxiety subsides and interest rates begins to increase The share prices of the larger organizations might likely take a hit in such a case and a possible slowdown in the UK leading to pressure on the consumer In case of a possible recession growth stocks are defenseless and vulnerable against a turnaround However for optimists the small caps of UK should continue on performing well Considering today's world there is no possibility that people will not use Google check their Facebooks do online shopping or tune in to music on their phones The technology giants of the US straddle the market and grab headlines with their activities Most of the commentators seem to now agree that companies like Apple Facebook Alphabet Amazon and Microsoft have now become unstoppable and now make around 10 of S P 500 Investors can choose an investment trust or the like that back the technology theme In the event that worldwide development is emerging presently it is highly unlikely for the technology trend to go in reverse Dame DeAnne Julius economist and the founding member of the monetary policy committee of the Bank of England said The global credit crisis took a long time to unwind and this has kept inflation low The world economy is now in the early stages of a cyclical upswing

Higher inflation and rising interest rates should be celebrated as the by product of a healthy recovery This implies a rise in bond yields and a fall in the prices Even in such a case the Bank of England seems more stressed over the credit boom and pressurized households over inflation and financial specialists have continues to squeeze out sensible returns from the gilts There seems to be little movement in the UK rates and the money printing by the central banks which has kept the rates down keeps on stirring the bond bubble In the event that recovery truly takes hold capital values will fall but fixed income might start looking more alluring to those looking to invest The funds that were managed with a higher accentuation on the environmental social and governance issues ESG have dramatically increased from 7 8 trillion to 16 3 trillion worldwide In any case while ethical traditional investing screened out the negative business sectors like that of tobacco or picked the best companies in these unethical sectors to invest in impact investors hunted down companies that were offering measurable societal benefits and positive solutions for the environmental and social challenges Triodos Bank research shows that 63 of the investors today would like to invest in an organization that are profitable and simultaneously make a positive impact on the society The research also revealed that 60 investors were willing to move their money if it was being invested in a company which had values and ethics conflicting with their personal beliefs The focus is also on the currencies of those European countries where monetary policies might be tightened soon and where the valuations are still appealing The underestimated SEK is preferred as the small open economy of Sweden profits from the close links it has with the Eurozone

The PLN can likewise pick up from Poland and the European economies strong trade links and gradually stricter monetary policy The real estate in the Eurozone has been benefiting from sustained European growth supported by strong fundamentals and appealing spreads courtesy the considerably higher yields as compared to the European fixed income markets Investors are favoring the underlying and listed real estate markets which are given help from fundamentals and the nature of the portfolio of the listed companies Significant returns a capacity to pass inflation and some protection from the effect of the EUR strength additionally bolsters share prices To conclude investors are continuously coming out in support of the companies which have exposure to the economy of the Eurozone because of the belief that the current recovery that Eurozone is undergoing offers upside for various stock options

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