What do you get when you combine sovereign debt crisis, major bank scandals, and volatile stock market conditions?
You get the one question that runs through everyones mind: Which Way is Up?
Perspectives on the precarious global economic climate are relentlessly flooding the news as well as taking their toll on investor sentiments as reflected in the volatile stock markets fluctuations worldwide. And yes, the bank scandals don't help either.
However, while the soveregin debt crisis takes center stage with Spain, Italy and Greece bearing the forefront of the blame of the euro's slide, perhaps a more global perspective with respect to borrowing costs for governments being at an all time low could reveal that the economic woes are more widespread than suspected.
In a recent article by Business Insider, an analysis of 10 year treasury bonds around the world shows that these borrowing costs are at all time lows and suggests that instead of being a sovereign debt crisis as most reported, it is rather a problem of being a "growth-deficient world". The article states, "What this essentially means is that there's a lot of money out there that sees no productive investments in the real world,".
RISK VS RETURN
Investing during such an ambiguous time might seem too risky for some. However, for others, such as the Qataris, it is a moment of opportunity, and safe haven investments such as property, can offer a cushion of protection and moreover, a positive return on investment. Qatar's Katara Hospitality is currently opting to purchase four luxury hotels in France, including the famous Hotel Martinez in Cannes on the French Riviera.
In a recent report by Wealth-X Research, Ultra High Net Worth investors (UHNW), are not only looking for these types of stable micromarkets or havens per se, but also taking "lifestyle" into their investment considerations by making these investment destinations such as London, Paris, and New York, their primary residences.
This new trend is good news for places such as the French Riviera where the numbers for foreign attracted investments has remained steady as reported by the Team Cote d'Azur when they presented their attracted investment report for 2011 at the World Investment Conference in La Baule on June 20th-22nd, where their reported findings showed a 53% attracted investment in 2011 as in 2010.
The bottom line: Investing in a good location leads you in the right direction...that is Up!
