Domestic / International : BothDomesticDomestic +Global
Clickbait Title: Mastering the Investment Market: A Guide to Equity Returns Over Change of Various Time Periods
The world of investments can seem daunting but with a little knowledge and the right guide, you too can navigate the stock market and capitalize on equity returns over long and short time periods. Understanding capitalization, equal weight, and groupings such as industry, super sectors, and various sector and stock combinations will be key to understanding the domestic and international markets. Here’s a breakdown of how you can evaluate equity returns from January of this year through 10-year periods.
Capitalization, or “cap” as it is often called, is a way of measuring the size of an organization by the total amount of its issued and outstanding shares. The higher the cap, the larger the market value of the company and the easier it is for the investor to assess the possible return.
Equal Weight is the process of giving the same weight or importance to each asset. By refinancing the funds in equal amounts and investing in different companies or industries, this strategy aims to reduce risk and maximize returns.
Investors often use groupings to help them evaluate the returns in the financial markets. Here is a brief overview of the different types of groupings available:
1. Industry: This refers to a group of companies that are involved in the same area or sector of the economy. For example, the technology sector includes companies such as Apple and Microsoft.
2. Super Sectors: This consists of the larger categories that separate the stock market into distinct subsectors. As an example, the technology sector is often divided into the information technology, consumer technology, finance, and healthcare.
3. Super Sectors and Sectors: This term encompasses the top-level of actually investing in a company or sector itself, you are doing so in a breakdown of several sub-sectors.
4. Industry and Stocks: This deals with the specific stocks and companies within an industry. Super Sectors and Stocks refers to the same thing.
5. Sectors and Stocks: Here the process is to look at a sector like technology and then investigate the specific stocks of the companies within that sector.
Domestic vs. International Markets
Investors have the choice to invest either in domestic or international markets. An investor can choose to invest in both markets, focusing primarily on domestic stocks, or investing in the international markets.
When making a decision between domestic and international stocks, it is important to look at a number of factors including the returns over different time periods. For instance, an investor may choose to evaluate how the returns look over:
1. 1 Month
2. 3 Months
3. 6 Months
4. 1 Year
5. 3 Years
6. 5 Years
7. 10 Years
As of 1st Jan, by studying these different timeframes and taking the risk factors into account, savvy investors should be able to make the best decisions when determining which markets to invest in.