The impact of economic indicators on an international financial diversification: a long term investment approach

Abstract

ABSTRACT Pakistan is one of the developing countries, whose investors invest out in diversifying long-term portfolio investments in unpredictable nature of the international market. The long-term viewpoint is lacking a systematic study from a perspective of economic indicators (inflation, interest and exchange rate). To address this gap the study attempt to develop a framework for investors of Pakistan by using inferential statistics and Sharp’s performance (SHP) techniques. The findings perceived influence of economic indicators on long-term portfolio investment (based on holdings: Stock and Bond), results indicated USA with (high-risk high return) and UAE (low-risk low return) and find both countries best investment option to invest for long term.