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If you are a global player in which country would you invest to maximize returns? Is it a strong global currency, highly industrialized economy, huge market for consumer goods, huge oil and gas reserves, high rate of economic growth or is it the per capita GDP that makes a country attractive to foreign investment.
for me the most important indicators are
1.political stability
2. long term government plan for new development.
3.various foreign investment policies
4. High GDP.
4. good and easy rule and invesment decreces .
It is not necessary that the boom in the stock market is an accurate indicator of economic progress; there are several factors responsible for the boom / growth in the stock market from the political stability to the country's industrial production capacity. The attractive foreign investment policy, high returns and the healthy infrastructure to lure foreign investors are also responsible for the increase in the stock prices.
Markets are generally highly volatile. The movement in prices of oil and gas due to uncertainty in the middle east or OECD countries are short term movements.
From long term investors perspective the most important is capital protection and sustainable growth of investment with regular returns.
Not necessarily, there are several parameters responsible to admeasure the growth, progress and or in boom of a country’s economy. Apart from stock market, Currency rate fluctuation, political factors, various foreign investment policies, countries industrial production and service rendering capacity/quality and etc… All of these factors help in admeasuring the country’s economy.
Yes, well managed, organized, regulated stock market is the right indicator of economic progress. One of the main features of the market (stock market, currency market, commodity market or any other market) is that it react the demand and supply then and there. i.e., the news coming out in the market will digest that moment itself. For example govt. changed their foreign investment policy, GDP data, govt. change, industrial production data, currency rate, crude oil price, war, natural calamities and lot more will digest the market then and there. If there any huge investment is coming to particular stock or the industry or in country it will create the demand and then it will digest.
The main drawback of the stock market is that it measures only monetary transaction or in money value. But it doesn’t show the cultural development of the people or country. It doesn’t indicate social development, educational level in the country directly.
There is another chance corporates or companies are not involved in all the sector and industry OR if there any other strong co operative movement involved in bussiness dealing, stock market will not be directly effected. But it will effect in GDP and industrial production etc.
I will take this somewhere else, I would go to emerging markets with higher ROI and invest in startups or acquisitions. Regardless the market, if you do not have valid insights and rely only on macro readings, you will end up either losing capital or losing higher returns as stable markets usually offer lower returns due to stability limiting boosts. Last point, each market has its key investment pool, like in the US now its silicon valley and tech companies, other countries like the GCC may offer returns on oil & gas, logistics and gas services and real estate.
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