Where Should I Invest My Money? The Best Money Makers And The Money Losers...
Posted on Thursday, August 03 @ 21:03:02 CDT by editor
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 | In the world’s economy, the honeymoon period is almost over. Global markets are at an important fork in the road. The period of “rapid growth – low inflation – cheap money” that had started with the free movement of international goods and services has come to an end. We are entering a new phase now, where global inflation will rise with the rise in energy costs and where growth will slow down. |
Interest-rate hikes, increase in energy costs, and the fear of growth turning into recession has deepened the sensitivity of global capital for risks and reinforced the cash outflow from the developing countries.
Turkey is one of the countries that have been affected by this movement. Turkish Lira and the stock market suffered a depreciation of over 20%, while the interest-rates increased by more than 5 points. These, combined with the slowing of cash flow throughout the world and the orientation of flow from developing countries such as Turkey to developed countries such as the States and EU members, has forced the investors to act more cautiously.
What will happen in the forthcoming term?
Following the States and Europe, Japan is also expected to increase interest rates. This means even more cash outflow from developing markets such as Turkey. Furthermore, the outbreak of international problems with North Korea, after Iran, has resulted in price rises in all goods, especially petroleum. Price increment triggers the increase in inflation. This chain reaction will eventually result in interest-rate hikes. In such cases, the cash outflow experienced in developing countries cause the exchange rates to rise. Considering the difficult negotiation process awaiting Turkey with the European Union and the presidential elections to be held in 2007, it seems that Turkish economy will be going through a very active term this coming year. Unless this difficult political period is overcome in a healthy manner, the economy will be affected adversely.
After this bombardment of information and interpretation, let’s see what you can make of the money you have. Firstly, let’s take a look at the graphic below.
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As shown in the chart, due to the Iran tension in the international market, goods such as petroleum and gold bring more profit than all other investment vehicles. Also, due to the cash outflow as a result of the interest-rate hike in the States and in EU, foreign currencies such as Euro, GBP and USD bring in high income to the investors.
Because of the reasons I have mentioned above, petroleum and gold are anticipated to have high yield in the forthcoming period. It can be said that foreign currency will keep earning within the next year due to the presidential elections that is expected to be difficult and controversial and the continuation of cash outflow from foreign investors. Yet another earning investment vehicle is treasury bills. Investors who want to profit from interest-rate hike in Turkey may obtain treasury bills at high percentage. At present, the income for the treasury bill dated 04.07.2007 is 18% net; and the income for the treasury bill dated 05.09.2007 is 21%. Taking into account that interest rate for forward accounts in some banks is around 14% net, it would be noticed that the treasury bill earns more than interest.
Above all, it must be considered that economies of the countries worldwide are linked to each other; and decisions must be made after adding the national dynamics and variables of the country on top of that. I believe that those who invest in the correct investment vehicles and who think globally will earn. In my opinion, those who take only the local variables into account will not be able to go beyond saving their money from inflation loss.
I advise you to bestow your money, not only through one bank and outputs of that bank, but only after you learn about the options offered by other banks as well. One will surely offer you more, or will lead you in a better course according to your objectives.
Finally, it will be to your benefit if you do not step into action before having the answers for all your questions.
I wish you profitable days…
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Average Score: 3.93
Votes: 16
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