Forbes, Kristin J.
March 2007
CATO Journal;Spring/Summer2007, Vol. 27 Issue 2, p193
Academic Journal
The article explains the lower relative rates of return that foreigners have earned on their U.S. investments, which might reflect optimal decisions in efficient capital markets. Estimates show that from 2001 through 2005, foreigners earned an average of annual return of 2.2% on their U.S. investments, contrast this with the 6.2% earned by American investors abroad. The disparity can be explained by the fact that a large portion of U.S. capital inflows reflect official sector purchases of U.S. assets. Another reason is that this differential represent different composition of foreign investment in the U.S. as against U.S. investment abroad.


Related Articles

  • Guide to investing in India: happy days are here again.  // Lawyer (Online Edition);11/24/2014, p1 

    The article offers tips on making investments in India. It suggests that India is a long-term investment so the entry strategy, together with choosing the right partner, is essential. It is opined that companies should have a five- to 10-year plan as returns are rarely realised before five...

  • Trinidad & Tobago: Country Conditions: Investment Climate.  // Political Risk Yearbook: Trinidad & Tobago Country Report;2003, p37 

    Presents information on foreign investment in Trinidad and Tobago. Difficulties faced by investors; Details of the capital markets in the state; Features of the Bilateral Investment Treaty of the state with the U.S.

  • Wise Up. Send Your Money Abroad. Wang, Penelope // Money;Mar2006, Vol. 35 Issue 3, p72 

    This article focuses on where investors can earn the biggest returns. For the fourth year in a row, international stocks outperform domestic ones in 2005, with an average gain of 17.5% vs. 6.9%. Some $155 billion cascaded into foreign and global stocks funds last year, 40% more than in 2004....

  • Do Foreign Investors Encourage Value-Enhancing Corporate Risk Taking? Byungmo Kim // Emerging Markets Finance & Trade;May/Jun2011, Vol. 47 Issue 3, p88 

    This paper examines whether foreign investors in Korea affect incentives for firms to take risks in corporate investment. The short-term focus of foreign investors encourages managers to engage in conservative investment behavior. On the other hand, foreign investors encourage managers to focus...

  • Has the Asian crisis changed the role of foreign investors in emerging equity markets: Taiwan's experience Lin, Anchor Y. // International Review of Economics & Finance;2006, Vol. 15 Issue 3, p364 

    Abstract: This paper examines whether the 1997 Asian crisis changed the trading behaviors of foreign investors and of local institutional investors in Taiwan''s stock market. There is little evidence that the Asian crisis changed the relationship between equity flows and market returns in...

  • Foreign Buyers Eye U.S. Munis. SLAVIN, ROBERT // Bond Buyer;9/27/2012, Vol. 381 Issue 33789, p1 

    The article reports increase in foreign investments in the U.S. municipal bonds markets. It explores possible benefits of investments in the the municipal bonds markets for the investors that provides with fixed revenue and higher yields. The U.S. Federal Reserve reports 11 times increase in...

  • Risks can run high when dealing in foreign bonds. Tramer, Harriet // Crain's Cleveland Business;3/15/2004, Vol. 25 Issue 11, p18 

    When John Arango warns investors against turning to foreign bonds to earn higher interest rates than they would on U.S. Treasuries, his message comes through loud and clear. "There is no free lunch," said Mr. Arango, manager of the Cleveland Branch of Legg Mason Inc., a Baltimore-based global...

  • The amnesty question.  // Finance Week;8/16/2004, p38 

    Focuses on the amnesty offered to offshore money invested by South African investors. Management of foreign investments openly; Improvement of the valuation of offshore portfolios; Generation of returns without exposure to unnecessary risk.

  • Real Estate Pricing. Chen, Jun; Hudson-Wilson, Susan; Nordby, Hans // Journal of Real Estate Portfolio Management;Jan-Apr2004, Vol. 10 Issue 1, p1 

    Some investors believe real estate has become overpriced because cap rates seem humerically low when compared with historical rates. Cap rates do not, by themselves, signal an over- or under-priced market, or a cyclical or secular trend. One needs to look at the connections between the capital...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics