When it comes to investing in Asia, China still gets most of the attention. China continues to attract more investors that any region in Asia, yet, there’s a hidden gem in Asia, namely South Korea, that I believe warrants your attention.
Economic growth remains strong. South Korea’s exports are expected to grow by 11.9%. This is also one of the most wired nations in the world - 95% of homes have broadband, compared with 58% in Germany. South Korea’s economic partnership with China is strong and growing stronger. China now accounts for about 25% of South Korea’s exports.
With the amazing rise in the value of gold, silver and other precious metals in the past few years many investors are looking to cash in on some of the spectacular profits they’re currently sitting on.
If all goes well, next month traders on the stock markets of Chile, Columbia and Peru (proposed as the Pacific Common Market) will be able to seamlessly buy and sell the shares of companies listed with each other. After two years of negotiation, the Integrated Latin American Market will instantly become Latin America’s second largest stock market, after Brazil’s.
Next on the list is talk of an impending ‘free-trade’ agreement between the U.S and South Korea, Panama and Columbia. There’s wide spread belief, but by no means certainty, that a deal will be struck in Congress approving these agreements before the August recess. With so much rancor in D.C these days, it’s hard to imagine any deal getting done, but the odds are high this one will go through.
If your house has gone down in value and you are considering dropping insurance coverage to save a few bucks, you may want to reconsider. I’m all for tightening the belt and saving money in creative ways during challenging economic times – but lowering your insurance coverage on your home is not a place to cut back on.
Kimberly Lankford, Contributing Editor, at Kiplinger's Personal Finance says you should never lower the amount your house is insured for just because housing prices have dropped. Read her recent article How to Save Money on Homeowners Insurance to find out more.
So what can you do?
A chef would tell you that it is very important to have the right balance of ingredients while preparing a meal. An incorrect proportion or combination of spices can result in a disastrous attack on the taste buds. Creating an investment portfolio is like preparing an entrée. Each investment vehicle placed in the portfolio is like an ingredient for an entrée. The proportions of securities used to build the portfolio will define its expected risk and return.
Asset allocation and portfolio diversification are both techniques used to identify the right combination of securities to put into a portfolio. Asset allocation identifies the asset class proportions while portfolio diversification suggests the correct mix of securities within the asset classes. However, just like an entrée should be created considering the taste preferences of the person eating it, a portfolio’s diversification and asset allocation methods should be suitable to the investor’s needs.