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Home » Finance » Investing » Sovereign Wealth Funds Are Changing The Investment Landscape, And May Push Good Stocks And Commodities Which Are In Demand To Much Higher Levels

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<h1>Sovereign Wealth Funds Are Changing The Investment Landscape, And May Push Good Stocks And Commodities Which Are In Demand To Much Higher Levels</h1>
What are sovereign wealth funds? They are the assets of sovereign countries that have been earned. Instead of holding them in government bonds as they once did countries are investing part of the money in stocks and commodities on a global basis. The Saturday, May 26 Financial Times devoted a large section to an issue I have mentioned several times; the 2.5 trillion dollars of sovereign wealth funds from China, Norway, Saudi Arabia, United Arab Emirates and many other countries [about 16 in all] that is to be invested globally. In addition, there is probably twice that much money sitting in these countries’ reserves that have not yet been earmarked for global stock, bond and real estate investing. Let me put it another way, these countries and others will use their capital to invest in stocks, bonds and commodities. Gone are the days when they would just buy government bonds with this type of money. Now they are putting it where it will earn better returns. THE MAJOR INFLUENCES OF THIS NEW TREND 1. Countries that have to sell bonds to finance budget deficits will have to raise interest rates to get their bonds sold. 2. Countries that can grow will attract these assets to their financial markets. 3. The commodities which will are needed to fuel this growth will also benefit. For example, it takes little imagination to realize that base metals and energy will be purchased. Suppose we are China, and we know that we will be using a lot of energy and base metals to build out our economy for the next fifty years, why not buy the stocks that will produce these things? Since we will be making them profitable why not participate in the profits? 4. Richer people in the developing world and richer central banks in the developing world will hedge their currency assets against losses in depreciating currencies by holding precious metals. Demand for precious metals will continue to rise. This gigantic pool of capital will change the way investing is done for years to come. It will be a lever to substantially raise the value of the growing stock markets of the world. It will also be used to raise the value of the commodities that will be in demand...such as energy, base metals and precious metals. For more information on Global investment visit http://www.howtoinvestglobally.com For more information on Guild Financialy services visit http://www.guildinvestment.com Guild Investment Management, Inc., is a registered investment advisor. All material presented herein is believed to be reliable. Investment recommendations and opinions expressed in these reports may change without prior notice. You can also read our past periodic market and economic commentary articles and subscribe to our mailing list by going to the Commentary Archive on our web site www.guildinvestment.com. -------------------------------------------------------------------------------- These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions. The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country. Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned. Guild’s current and past market commentaries are protected by copyright. Apart from any use permitted under the Copyright Act, you must not copy, frame, modify, transmit or distribute the market commentaries, without seeking the prior consent of Guild.
<h2>About Author</h2>
Mr. Guild founded Guild Investment Management in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. Mr. Guild is a recognized expert in the areas of international investing and economics. He has been a writer and speaker on economic issues for 30 plus years and has been widely quoted in the world media. He holds a BA in economics and an MBA with highest honors. 
 
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