global market exposure

[Antho]

How does global market exposure help in reducing risk and enhancing potential returns?

 

[stoch]

How does global market exposure help in reducing risk and enhancing potential returns?

What do you mean by global market exposure? Buying some index of stocks that includes equity indices from different countries? I think it will have decent positive correlation with US stock market as it's performance affects stocks around the world through risk-off/risk-on. To reduce risk you have to pick assets that have negative correlation, hence it's not a kind of an asset that you can use for diversification purposes.

 

[kajalnigam]

How does global market exposure help in reducing risk and enhancing potential returns?

According to me, global market exposure reduces risk by diversifying investments across multiple areas and industries, while also increasing potential returns by providing access to a variety of development opportunities and market cycles.

 

[stoch]

How does global market exposure help in reducing risk and enhancing potential returns?

Via diversification. You have to find contracts in which risks cancel each other or at least partly this goal is achieved by using those contracts. I use FX options together with CFD contracts from Hotforex to construct position which only be exposed to particular risk, like risk that price will drop below some level on some certain future date, otherwise I will be in profit.