In top-down analysis, what factors do you look at when deciding a Country? I vaguely remember the CFA ciriculum going through this. Anyone else remember?
bump, u guys know this
analyze these four factors and factor in the risk - infrastructure - stock markets - economy - politics
well, central bank policy is important as it effects both interest and currency value, demographics is a very hot topic lately, politics is very important if you are investing in emerging markets. is the country net exporter of energy? or maybe its geopolitic location is very important (energy lines). How friendly is the government (and courts) to foreign investors? How liberal is the market? i try to understand what has been the main driver of growth and the country’s competitive advantages. will the country be able to sustain competitiveness? But when you say investing in a country so you mean simply buying a country ETF? Or specific stocks or bonds? That adds couple layers to the analysis. You have to be able to explain the whole investment thesis (catalyst) less than 2 minutes. Oh forgot to mention the current account balances, how big is the budget and trade deficit (if any) and are the deficits sustainable? and how?
literacy rates, budget deficit, infrastructure, open market policies, birth rates, population age…
Thanks ! That’s what I needed