Abstract In order to determine the value of index investments as an investment strategy, this paper weighs several important considerations. It defines index funds and lists the types of index funds that are available to the investor. It then gives a thorough list and analysis of the major advantages and disadvantages of index investing. The paper then lists the alternatives to index investing and investigates the advantages and disadvantages of these alternatives. The Efficient Market Hypothesis is explained and how this might impact the evaluation of index investing and the alternatives to index investing. It concludes this case study by giving a personal analysis of whether the writer would include index investing in his personal portfolio.
From the Paper "Simply put, an index fund is a mutual fund that attempts to match, with as much accuracy that is possible, the performance in a stock market index. Mutual funds have created S&P500 index funds in an attempt to copy the Standard and Poor (S&P)500 index, by buying all 500 stocks in the same percentage that they are present in the index.
"Interestingly, S&P 500 tracks the performance of large company stocks in the United States, like the Dow Jones Industrial Average. The S&P 500 index tracks the stock prices of 500 big companies, which account for close to 80 percent of the total market value all of the stocks that are traded in the United States. Index funds mirror the returns of a specific index, or a group of securities, that are considered measuring sticks of the behavior of the market as a whole. If the market increases 5% in one year, the index will also increase by close to 5% in the same specific time frame."
Abstract In this article, the writer discusses real estate investing. The writer looks at ways to invest and save money in real estate. The writer examines the appeal of real estate investment for individual homeowners. In this paper, the writer also discusses real estate investing as a financial investment on a larger scale.
From the Paper "Investing in real estate has long held a strong allure for many individuals-their homes may be the only real estate investment they own, but with options such as reverse mortgages and home equity loans many individuals consider a single residence investment sufficient. Other investors are drawn to real estate because there is a tangible asset-land or buildings-that does not exist with many other types of investments. Still, other investors think of themselves as real estate moguls in the mold of Donald Trump who ..."
Abstract This paper analyzes why Thailand may be considered better for direct foreign investment than Ghana. The paper discusses exchange rate data, capital sources, sensitivity analysis, alternative investment and financing decisions, capital budgeting and contingency plans. It looks at the risks that may be involved with direct foreign investment in Thailand and describes the rationale used in the selection of Thailand as the clear choice for an investment.
Outline:
Country Selection
Exchange Rate
Capital Sources
Sensitivity Analysis
Alternative Investment/Financing Decisions
Capital Budget
Contingency
Conclusion
From the Paper "As is readily apparent, decisions as to what country to select when considering a direct foreign investment are often highly complicated. Additionally, even when a country is selected, a multitude of complex factors make up the various strategies that a firm must implement to hedge the various risks involved in conducting business overseas. With regard to the service firm, the decision was made to expand operations in the country of Thailand. With a healthier economy, a relatively stable government, and friendlier business environment, Thailand was determined to offer better investment opportunities than Ghana. This is not to imply that Ghana would not constitute a wise investment decision, as many risks inherent to the country could be mitigated; however, Thailand's socio-economic, political, and exchange rate circumstances were determined to be more favorable than Ghana's."
Abstract This paper studies two different approaches to international investments: The multilateral approach, which is favored by developed nations and the bilateral approach, which is favored by developing nations. As the paper explains, since the negotiations on MAI (Multilateral Agreement on Investments) fell apart, the developed world has been attempting to renew the effort through the other world bodies like WTO. This paper examines which of the above approaches is most suited to the world and in particular to the developing countries. The paper also asks whether a multilateral approach will necessarily lead to increased global FDI inflows. This paper ultimately proves that one size does not fit all, since investments are too sensitive and complicated to be governed by an umbrella agreement covering the entire world. Thus, the paper concludes, the WTO's attempt to address non-commercial factors through a multilateral agreement may not be worthwhile. Further, the paper recommends that if the WTO is to increase FDI, it should continue to concentrate on trade rather than bringing investments under a multilateral arrangement.
Table of Contents:
Acknowledgements
List of Tables
List of Figures
List of Appendices
Introduction
Need for Study
Objectives
Hypothesis
Limitations
Chapterization
Literature Review
Theories on International Trade
Theories on FDI
What factors determine the FDI?
Is Global FDI Tariff Jumping?
Multilateralism & Bilateralism
The Doha Round
The Cancun & Hong Kong Round
India's Reservation on WTO
Methodology
Methodology
Source
Assumptions
Expected Outcome
Results & Findings
Findings from Time Series Data
Findings from Cross Section Data
Conclusions & Policy Recommendations
Suggested Areas for Further Research
Bibliography
End Notes
Tables
Figures
Appendices
From the Paper "At present, the foreign investments are protected under the BITs (Bilateral Investment Treaties) and certain other regional arrangements. Since the 1960s, the BITs have increased greatly in numbers and today there are more than 2300 BITs (Source -UNCTAD). There has been a sustained debate between the developed and the developing world on the utility and/or continuance of BITs. The stand of the developed world is that the BIT is an inadequate protection since it often (not always) subordinates investment disputes to the local laws of the host country rather than international arbitration. Also, the process of negotiations of BITs is costly and time consuming. The western world also holds the view that the BITs do not sufficiently address the issue of transparency, predictability and stability of the FDI regime of the host countries."
Abstract This paper discusses the nature of foreign private investment as seen in the actions of multi-national enterprises and other entities as they open plants in foreign countries and invest capital and expertise in these operations. The paper considers the advantages and disadvantages of such investment and some of the reasons it has been increasing in the new global economy.
From the Paper "Foreign Direct Investment (FDI) is a major process of transferring capital, technology and other business benefits from the developed world to the underdeveloped world today, as well as from all parts of the world into any economy in which investors want to put their money for the benefit of that economy and the investors themselves. Some such investment is made by governments, some by major economic institutions such as the World Bank and the IMF and by companies choosing where to place their operations for the future. Foreign private investment occurs when companies or individuals make such investments. Making such investments has advantages which attract investors, but the process can also have disadvantages which potential investors need to remember. FDI "is conventionally defined as a form of international inter-firm co-operation that involves significant equity stake and effective management decision power in, or ownership control of, foreign enterprises" (Luiz 2)."
Abstract Corporate investing programs allow firms to maximize their profits by utilizing excess cash reserves and strategically investing in vehicles with potential for high returns while incurring the lowest possible risk. This paper discusses such programs, as well as the concept of ?beta,? which is a method for calculating the risk of an investment and how beta can be calculated.
From the Paper "The most prevalent form of corporate investing is when larger companies invest in smaller companies with huge potential. Passive investment funds also exist, as an alternative or complimentary investment option. Corporate investing programs may be loosely organized programs affiliated with the existing companies business developments or may be self-contained entities with a strategic charter and mission to make investments congruent with the parents company strategic mission. Stuart Read, vice president of marketing at AvantGo states ?with cash in the bank, big companies are looking for ways to leverage that asset, and if there is a good investment, they'll take it.? Firms encounter different implications when investing than individuals, firms face a different set of rules and regulations to in which they must abide, firms have differing tax consequences, they also face a different set of risks."
Abstract This paper examines the structure of the barbell trusts, believed to be one of the main causes of the capital investment trust crisis 2001 - 2002. It looks at how the demand by investors seeking high annual returns in today's almost inflation free economy was successfully being met with barbell investment trusts in a period of buoyant stock markets and how the years 2001 and 2002 saw a fall in stock markets which these barbells could not handle. It shows how these investment trusts were structurally flawed, geared only to a bull market and were seeping in complex risk that very few really understood.
From the Paper "Falling markets and the forced selling of shares by banks, in an illiquid market lead to disproportionate share price drops. The asset base of these funds was being eaten away at. Consequently, an even higher yield was now required to meet dividends as there was less capital to work with. Analysts had warned that barbells were offering unrealistic high headline dividend yields. Barbell trusts found they could not meet the headline dividend yields that they had offered. Most barbells hadn?t been in operation long enough to build up revenue reserves. As a result, a few barbells failed to meet their dividends and dividends had to be cut. However a dividend cut by one trust did not solely affect that trust."
Abstract This paper analyzes various aspects of India's emerging market as they relate to attracting potential foreign investment. The paper discusses the creation of investment options by India's government, the political stability of the government and the soundness of investing in this global market.
Tags: political structure, transportation, tariffs, education, infrastructure, direct foreign investment, government policy, foreign policy, telecommunications
Abstract This paper focuses on investing and the pros and cons of investing in the following companies: Continental Airlines, Washington Mutual Bank, Bank of America and Jet blue Airways.
From the Paper "According to Yahoo! Finance, Continental Airlines is a United States air carrier engaged in the business of transporting passengers, cargo and mail. As of year-end, Continental Airlines flew to domestic and international destinations and offered additional connecting service through alliances with domestic and foreign carriers. It directly served European cities, seven South American cities, Tel Aviv, Hong Kong and Tokyo as of December."
Tags: issues, concerns investing, Continental Airlines, Washington Mutual Bank, Bank of America, Jet blue Airways
Abstract This paper explores whether or not the human resources (HR) within an organization should be used as critical investments. To support this exploration, the terms "human capital", "human assets", and "intellectual capital" are discussed, on the merits of each specific term, as well as in relation to one another. Finally, a conclusion is drawn that determines if human resources should be viewed as any or all of the above terms and if HR managers should utilize them as critical investments in an organization's future.
From the Paper "All of the above aspects of HRM are interrelated, with decisions in one area affecting all other areas. The means by which a firm approaches any of these six areas will therefore have an impact on the organization's overall human resources practices. Generally an organization's Human Resource Manager coordinates the key components of HRM. However others, such as line managers, employees, unions and even shareholders can have important contributions to make to the overall HRM practices of the organization. Irrespective of who is involved in the HRM practices of an organization, ?HRM must be engaged in creating institutional change capacity, identifying social trends impacting future business opportunities, and building organizational cultures that can accomplish radical innovation.? "
Abstract The paper discusses the issue of staff training and return on investment. It looks at the relationship of training to a company's goals and objectives and the concept of ROI (return on investment).
From the Paper "There is little doubt that contemporary organizations particularly those that define themselves as learning organizations intent upon enhancing workers' knowledge and skills emphasize training as part of ..."
Abstract This paper discusses the investment management of Jess Walton. It discusses the objectives, including determining the type of bond(s) that were best to purchase, and whether or not she should borrow money to pay for her purchase goals, or take money from her cash on hand to make the purchases and forego a loan. Furthermore, it discusses Jess' investment risk at the current time that would be dependent upon the type of bond she selects.
From the Paper " Investment Management: Jess Walton Investment Objectives and Tolerance For Risk She is financially in good condition, with no debts to date, a steady income from the Systems Research and Development Department, and a mortgage free house valued at $400,000. With $65,000 in savings, she also has an added annual income of $3,000 from a $75,000 portfolio of Canadian Blue Chip Stocks."
Abstract A paper that discusses the common forms of tariff and non-tariff aspects to international trade. The paper discusses government subsidies, aid & loans, customs valuation, quotas, standards, licensing arrangements, local legislation, import licenses and foreign-exchange control. The author also looks at barriers to international trade and investment.
From the Paper ?In the interest of a country's economical activities, the government of a nation has the right to levy multiple barriers to trade. There are two kinds of barriers to trade: 1. Tariff 2. Non- tariff barriers to trade and investments. Both of these methods of hindering trade effect investments as well as trade in general.?
Abstract In the first section of this paper, an overview of the relation between FDI and development is presented. The paper notes that the ability to harvest the benefits of FDI in terms of economic development varies greatly across countries and that many factors are responsible for these variations. Therefore, in the second section, the paper works out various correlations of FDI with a number of determinants of growth like private and public investment, infrastructure development, human skills etc. during the decade immediately following reforms. The paper also determines and examines these correlations in respect of different states in the country in order to explain the state wise differences in growth and FDI inflows. Having identified the factors affecting FDI inflow and their correlations with growth indicators, the issues involved are highlighted and policy implications are put forth in the third and the last section of the paper.
From the Paper "Last two decades have witnessed a growing consensus among the developing countries that the net results of Foreign Direct Investment (FDI) can be positive. Macroeconomic objectives were attained in most of the developing countries and progress was made in key institutional reforms. In mid 1990s the net capital flows to developing countries had reached a peak of 6% of their GDP but after a decline in 1999, it has started recovery & in 2004 it had reached up to 4.5% of GDP. The current account balances in most of the developing countries recovered in the later years of 1990s from 'deficit' to 'surplus', which was 2% of GDP in 2004. As a result, the foreign exchange reserves swelled, which instead of being invested in domestic markets, continued to finance a large share of the US current account deficit in 2004. The net equity flows have increased faster than net debt flows. They have been stable at 2.7% of GDP since 2002. On the contrary, the net debt flows to developing countries have shown wide fluctuations and in 2004, it was only 1.4% of GDP. These favorable external and internal factors reflected themselves in a record expansion in developing-world GDP growth in 2004 when it touched 6.6%, which is much higher than the global average during the same period i.e. 3.8% only. Simultaneously, as the Official Development Assistance (ODA) saw a dramatic decline in 1990s, FDI emerged as the main preferred alternative source of development finance. Within the Official flow also, the shift from loans to grants has accelerated. Figure 1 Therefore, FDI is considered better than the 'bank credit' because of high and variable interest rates and 'portfolio investment' because of risks of high volatility with it. Moreover, it has served as the principal channel for transfer of long-term private capital, technology, managerial expertise, access to major foreign markets of the world for better trade opportunities and for establishing a link between domestic economies and world market. As a result, it is seen as an opportunity for domestic capacity building for production, innovation, increasing share in the world-trade through backward and forward linkages. All these factors are responsible for faster growth of domestic economy and increase in per Capita GDP, a cherished goal of every country in increasing living standards of its people. Nevertheless, there are also potential drawbacks associated with the foreign capital. Potential drawbacks include a possible deterioration of the Balance of Payment as profits are repatriated, a lack of positive linkage with local communities, harmful environmental impacts on host countries, and effects on competition in the local markets as they may virtually attain a monopoly position harming the local industries etc. However, neither the in-flow of the FDI nor the gains from FDI are automatic. The First Section presents the overview of the role of FDI for Development. In the Second Section, we will examine the past trends in FDI inflow in India and its contribution to India's economic growth. We will also identify the factors influencing FDI inflow in India. In the third section, we will discuss and examine the issues emerging out of the analysis of the factors influencing FDI inflow in India and finally suggest policy measures required to be taken to increase in-flow of FDI and maximize its benefits and minimize costs."
Abstract This paper addresses foreign direct investment in India. It discusses laws and regulations, pros and cons from the legal side, restrictions on FDO, and advantages or disadvantages of building a plant in India to manufacture scooters.
From the Paper "According to an essay published on the Government of India's Ministry of Finance website in recognition of the importance of Foreign Direct Investment FDI in stimulating economic growth, the government of India has been reforming laws ..."
Tags: FDI, foreign direct investment, india, free trade, protectionism, taxation, government intervention
