An interesting conclusion

The current economic downturn is not only unusually severe and prolonged but also quite widespread. Essentially all industrialised countries have turned down during the past year, as have many developing countries. This synchronisation of business cycles across countries is by no means an unusual event. Indeed, contrary to much recent discussion (e.g., Economist, 2009), the world’s countries seem to be moving more closely over time, not less. That is, there is little evidence of “decoupling,” the idea that business cycles are becoming more independent and less synchronised across countries.

I always believed the global business cycles were moving together. This interesting paper discusses the issue in depth. I also believe the global equity markets are synchronised. When you buy foreign markets you buy volatility.Click here to read the whole article.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977