Excutive Summary

EXECUTIVE SUMMARY

Purpose: To evaluate a proposed method of global investing with regards to international stock market indices, interest rates, and inflation. This report will aide International Investments, Inc. in deciding whether or not to recommend global investments to its clients.

In order to provide an accurate evaluation of the proposed method regarding global investments, two types of analysis were performed, statistical and macroeconomic. The statistical analysis used data from previous years to be able to evaluate and possibly predict future trends in stock market indices in foreign countries with respect to inflation and interest rates. The macroeconomic analysis consisted of evaluating a countries unemployment rate (labor force), stability, infrastructure, natural resources, and various other factors to help acquire a recommendation.

Statistical Findings

Our statistical findings suggest that both inflation and interest rates would be a good indicator of a foreign country’s stock market. Although these two factors (inflation and interest rates) did not fully explain past discrepancies, they did, however, display a strong correlation to allow a conclusion that there is a relationship between these variables.

Macroeconomic Considerations

The macroeconomic weighs an important factor. A country’s stability can have the same, if not more, of an impact on the country’s stock market than either inflation or interest rates. The same can be determined of the other macro factors that were considered in this report. Our macroeconomic findings only reinforce our analysis that by overlooking any of these factors and variables, when considering foreign investments, it can be detrimental.

Based on these finding, we recommend that International Investments Inc. to recommend foreign investments to their clients and in doing so to take inflation, interest rates, and macroeconomic factors into account with diligence, as with any domestic investment they would...