Portfolio Project
Université Nice Sophia Antipolis
Institut d'Administration des Entreprises
This paper is submitted in the context of the following subject:
Portfolio Project
Risk & Stock Market
M2 EUROPEAN AND INTERNATIONAL PRIVATE BANKING
Submitted by: Instructor:
KAKAVAND Samaneh EGRET Paul
DOU Yan
Academic Year 2012/2013
Introduction:
Global Economic & stock market Performance: Mixed signals
January 2013 is a great month for stock market. Since January, the stock market goes up, so maybe this stock market bulls will keep running in the whole year, especially, the Dow Jones Industrial Average is increasing dramatically, from 12520 in July 2012 to 14275 today.
Source: Google Finance
One potential reason for the optimism is a positive sense of global economy in the future; the euro zone is not going to break up, because in September 2012, European Central Bank promised unlimited bond-buying to keep the euro together; China has avoided a hard landing, America avoided falling off the fiscal cliff. Additionally, Federal Reserve agreed to keep interest rates down to help encourage investment and decrease the unemployment rate. Based on the above economic performances, we can argue that the share prices will go up, because the global economy is recovering from recession. Since the bonds yields will keep running low in 2013, investment in equity market is a more reasonable choice.
However, market risk and uncertain can never be ignored. The biggest reason for caution is the gap between stock-market optimism and economic reality. The gap is widest in Europe: Euro-zone may keep the single currency, but its economies are still in deep trouble: the IMF expects the euro-zone economy to shrink by 0.2% this year. It will a long to go to get rid of recession. With more fiscal austerity ahead and credit tight, it is hard to see how Euro-zone returns to growth.
Source: Yahoo! Finance
Strategy:
Due to
Institut d'Administration des Entreprises
This paper is submitted in the context of the following subject:
Portfolio Project
Risk & Stock Market
M2 EUROPEAN AND INTERNATIONAL PRIVATE BANKING
Submitted by: Instructor:
KAKAVAND Samaneh EGRET Paul
DOU Yan
Academic Year 2012/2013
Introduction:
Global Economic & stock market Performance: Mixed signals
January 2013 is a great month for stock market. Since January, the stock market goes up, so maybe this stock market bulls will keep running in the whole year, especially, the Dow Jones Industrial Average is increasing dramatically, from 12520 in July 2012 to 14275 today.
Source: Google Finance
One potential reason for the optimism is a positive sense of global economy in the future; the euro zone is not going to break up, because in September 2012, European Central Bank promised unlimited bond-buying to keep the euro together; China has avoided a hard landing, America avoided falling off the fiscal cliff. Additionally, Federal Reserve agreed to keep interest rates down to help encourage investment and decrease the unemployment rate. Based on the above economic performances, we can argue that the share prices will go up, because the global economy is recovering from recession. Since the bonds yields will keep running low in 2013, investment in equity market is a more reasonable choice.
However, market risk and uncertain can never be ignored. The biggest reason for caution is the gap between stock-market optimism and economic reality. The gap is widest in Europe: Euro-zone may keep the single currency, but its economies are still in deep trouble: the IMF expects the euro-zone economy to shrink by 0.2% this year. It will a long to go to get rid of recession. With more fiscal austerity ahead and credit tight, it is hard to see how Euro-zone returns to growth.
Source: Yahoo! Finance
Strategy:
Due to