The Chinese Stock Market
What is the Average Stock Market?
In today's globalized world there is no such thing as an average stock market. While countries are more interlinked than ever before they are also dependent than ever on domestic conditions which dictate performance.
This can be seen in many Asian economies that have experienced unprecedented growth over the past decade when compared to their European neighbors and the U.S. The growth experienced in these Asian countries has come about as a result of ongoing population growth, rising income levels and that all pervading force that is globalization.
Through globalization, economies have been opened to businesses around the world and the critical mass of population in many Asian countries has given them a comparative advantage in this area. While there are many differences between the economies of countries, their stock markets are becoming more and more similar.
Investors' around the world are able to access any stock market they choose and invest their funds, or funds of someone else, into them.
This action has been made possible through the development of the online economy where money has simply become a symbol rather than an actual physical object. The globalized stock market has actually become the average stock market and has benefited from the last decade of sustained economic growth.
The average stock market generally increases at a rate above general economic growth; this provides an incentive for investors to choose the returns offered on the stock market as opposed to leaving their money in the bank. The recent economic downturn will have a serious impact on the global stock market, in other words the average stock market.
The globalized nature of our world has meant that growth or contraction in one country cannot be contained and will eventually spread around the world. The increased flow of information has also resulted in investors who are more informed as to where they should put their money and, at the moment, the safest place is the bank, rather than the stock market.
The Chinese Stock Market
The Chinese stock market is definitely not your average stock market. It has experienced double digit growth over the last ten years and has outperformed markets around the world. How has this occurred?
The strong returns offered by the Chinese stock market can be attributed to a country which is on the verge of becoming a superpower; some say it already is a superpower. The people living in China are desperate to compete on the world stage in all areas. This was especially the case during the Olympics in 2008. China put on an Olympics which nobody could forget. It is this ambition that has seen the country grow at such a fast rate!
Companies have invested huge amounts of money to satisfy ambitions which require continued development. As these companies become profitable they can choose to list on the Chinese stock market and the stock is then accessible to investors around the world.
If investors have the choice between the U.S. stock market and the Chinese stock market they must make the decision of whether they would like higher returns and higher risk offered by the Chinese stock market or lower returns and lower risk offered by the U.S. stock market.
The element of risk in the Chinese stock market has been lessened in recent times as the Chinese government recognizes China's increasingly important role in the world economy and take steps to regulate and reform its banking and financial system to encourage trust in the country's stock market.
The recent economic downturn has not only hit China but also the Chinese stock market. Investors are less willing to invest their money unless the risks of very low.
Is the India Stock Market any Better than the Average Stock Market?
While the Chinese stock market has offered strong returns to investors, the India stock market is emerging as the place to put your money in the future. While the political systems of India and China are starkly different, India being a democracy, the growth the economies have experienced over recent times has been remarkably similar.
The India stock market has been able to grow despite large sections of the country not having enough money to eat let alone invest money in shares.
India has a huge population and has been able to use this comparative advantage to its benefit by offering U.S. and European companies lower labor costs and a regulatory environment which makes doing business easy and cheap. The Chinese government determines much of China's development however in India it is the ambitions of individual people that are responsible for the direction the country heads in.
These are people who have experienced a lower a standard of living than people in the U.S. or Europe and now they have the opportunity and the potential to improve this position. This optimism has translated into the India stock market and returns have been strong in recent times and will continue to be strong so long as the country remains true to its goals.
As India continues to grow and achieve standard of living parity compared to other western countries, economic growth is expected to remain strong despite the recent global financial crisis.
In today's globalized world there is no such thing as an average stock market. While countries are more interlinked than ever before they are also dependent than ever on domestic conditions which dictate performance.
This can be seen in many Asian economies that have experienced unprecedented growth over the past decade when compared to their European neighbors and the U.S. The growth experienced in these Asian countries has come about as a result of ongoing population growth, rising income levels and that all pervading force that is globalization.
Through globalization, economies have been opened to businesses around the world and the critical mass of population in many Asian countries has given them a comparative advantage in this area. While there are many differences between the economies of countries, their stock markets are becoming more and more similar.
Investors' around the world are able to access any stock market they choose and invest their funds, or funds of someone else, into them.
This action has been made possible through the development of the online economy where money has simply become a symbol rather than an actual physical object. The globalized stock market has actually become the average stock market and has benefited from the last decade of sustained economic growth.
The average stock market generally increases at a rate above general economic growth; this provides an incentive for investors to choose the returns offered on the stock market as opposed to leaving their money in the bank. The recent economic downturn will have a serious impact on the global stock market, in other words the average stock market.
The globalized nature of our world has meant that growth or contraction in one country cannot be contained and will eventually spread around the world. The increased flow of information has also resulted in investors who are more informed as to where they should put their money and, at the moment, the safest place is the bank, rather than the stock market.
The Chinese Stock Market
The Chinese stock market is definitely not your average stock market. It has experienced double digit growth over the last ten years and has outperformed markets around the world. How has this occurred?
The strong returns offered by the Chinese stock market can be attributed to a country which is on the verge of becoming a superpower; some say it already is a superpower. The people living in China are desperate to compete on the world stage in all areas. This was especially the case during the Olympics in 2008. China put on an Olympics which nobody could forget. It is this ambition that has seen the country grow at such a fast rate!
Companies have invested huge amounts of money to satisfy ambitions which require continued development. As these companies become profitable they can choose to list on the Chinese stock market and the stock is then accessible to investors around the world.
If investors have the choice between the U.S. stock market and the Chinese stock market they must make the decision of whether they would like higher returns and higher risk offered by the Chinese stock market or lower returns and lower risk offered by the U.S. stock market.
The element of risk in the Chinese stock market has been lessened in recent times as the Chinese government recognizes China's increasingly important role in the world economy and take steps to regulate and reform its banking and financial system to encourage trust in the country's stock market.
The recent economic downturn has not only hit China but also the Chinese stock market. Investors are less willing to invest their money unless the risks of very low.
Is the India Stock Market any Better than the Average Stock Market?
While the Chinese stock market has offered strong returns to investors, the India stock market is emerging as the place to put your money in the future. While the political systems of India and China are starkly different, India being a democracy, the growth the economies have experienced over recent times has been remarkably similar.
The India stock market has been able to grow despite large sections of the country not having enough money to eat let alone invest money in shares.
India has a huge population and has been able to use this comparative advantage to its benefit by offering U.S. and European companies lower labor costs and a regulatory environment which makes doing business easy and cheap. The Chinese government determines much of China's development however in India it is the ambitions of individual people that are responsible for the direction the country heads in.
These are people who have experienced a lower a standard of living than people in the U.S. or Europe and now they have the opportunity and the potential to improve this position. This optimism has translated into the India stock market and returns have been strong in recent times and will continue to be strong so long as the country remains true to its goals.
As India continues to grow and achieve standard of living parity compared to other western countries, economic growth is expected to remain strong despite the recent global financial crisis.