Money from Country Segmentation for Business and Stock Investing

This post dwells on some unusual ways of segmenting between stock markets and within a single stock exchange.

Retail stock investors are rarely accustomed to operating abroad. Regulators and politicians like it this way. It leaves the field of world-wide investing to elite private equity.

Here are some revealing facts about why stocks on the other side of a border may be greener:

1. Interest rates vary widely. All Central Banks do not act in concert.

2. Inflation rates also vary between countries. Some governments reduce their deficits to manage the phenomenon.

3. Gross Domestic Product varies by base sizes, and growth rates.

4. Some countries form blocs. Cartels lend group powers to some stocks, while destroying others.

5. Some governments are driven by business owners, albeit behind the scenes. They take decisions in favor or against targeted stocks.

Now you may be annoyed, for none of this is new. However, creative segmentation starts by putting discrete environment scan factors together.

How can the five pieces of common knowledge listed above lead to segmentation for a better stock portfolio?

- Focus on stocks of international companies that buy cheap and sell in the first world.

- Use time zone differences to make intra-day gains in a stock exchange that is heavily influenced by another

- Track and mimic foreign financial institutions

- Analyze implications of public statements by politicians heavily influenced by business and extraneous interests

- Study political donations by business where such information is in the public domain, as in the United States

Retail investors in some countries are barred from buying stocks overseas. Such freedoms are restricted to elite. However, it does make sense to pick and choose between stocks in various exchanges, where possible.

We will turn to sectors and industries tomorrow.