Studio Press

1990-1995 DIVERSIFICATION WORKED Global diversification proved effective in international portfolio investing due to:Disparity in growth rates among major economies; Brunt of world recession; Relative inefficiencies in international portfolio investments (Emerging Markets Hysteria had yet to unfold)
1994-1996 TRANSITIONS
Broadening global recovery, US bail-out of Mexico, and the US entry into the "New Economy" paradigm all led to improved global market sentiment, which brought markets more in line
1997-2000 UNIFORMITY
As world economies begin to sustain their recoveries and cross-border protfolio flows accelerate, global stock markets move in tandem, making global diversification harder to achieve, simply based on geographical plays
GDP growth in industrialized nations: 1997= 3.4%, 1998= 2.4%, 1999= 3.2% 2000 Forecast = 4.2% Asia: Asian turmoil reverberates in global markets, one week after Hong Kong's stock market sufferred its biggest drop ever, losing nearly 25% in 4 days on uncertainty regarding the HKDollar. Russia: Russia gets partial debt moratorium on foreign debt. Trading in Russian Rouble is suspended after Russian Gvt. Abandons setting a a floor value for the currency of 7.13 to the dollar, implementing a new floor of 9.5 to the dollar. Brazil: Despite $41 bln IMF loan package to Brazil in Nov, the Lat Am nation devalues its currency after Head of regional State refuses to repay State debt. January Tech Sell-off: Tech stocks get a beating on overvaluation worries, exacerbated by investors' unloading of stocks after New year to avoid capital gains tax.