“If a problem is fixable, if a situation is such that you can do something about it, then you don’t have to be concerned. Whether it’s not fixable, then there is absolutely no help in worrying. My investments could crash and burn. For my investment mix that is unlikely to happen, though it might.
I may also live past 100 or I possibly could die in the next few months. Realistically either could happen. I suppose it’s about balance. The truth is there’s only so much you can control and if you cannot control something then there’s not a good deal of sense worrying about it. Avoid catastrophizing and plan with the best information offered by the right time modifying as needed.
Interestingly, each of the ten countries that saw the biggest percentage boosts was an emerging market, with six of the very best ten countries on the list coming from Latin America. On the list of companies that saw the biggest lowers in CDS spreads, eight were developed marketplaces with only two growing marketplaces (Costa Rica and Romania) causing this to be a list. If nothing at all else, this desk indicates that in the market’s view, the divergence in risk between developed and rising markets widened over the time. There are some who view both sovereign CDS and ratings as too narrow in their concentrate of debts. A country that has little contact with default risk can come in contact with other types of risk still.
There are services that try to provide more extensive procedures of country risk, encompassing economic, legal, and political risks. Political Risk Services (PRS), for instance, provides measures of country risk on different dimensions as well as a composite way of measuring a country risk. These ratings are numerical, with higher scores indicating safer countries and lower ratings signaling more risk.
120. However, I did so compute the percentage changes in PRS scores from January to June 2013 and found out as with ratings agencies, that country risk scores tended to be sticky and changed little relatively. There was no change in the median PRS score between January and June 2013 and the average PRS score median (average) changed by only -0.19%, indicating a very moderate increase in overall risk over the nationwide countries. All of the countries on both lists are emerging markets Almost, which is to be expected since you would expect the biggest volatility in risk scores in these countries.
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Thus, Latin American and African countries dominate both the “increased risk” and “decreased risk” lists, with this measure. While default risk steps may be used to price sovereign authorities bonds, it is an open question concerning whether they should influence or be used in equity pricing. While there are some who argue that the country risk should be diversifiable to a global equity trader, the increasing correlation across countries has made that debate difficult to guard. I believe that equity risk monthly premiums differ across countries which the variation is correlated with the default spreads for these countries.
In fact, I posted on country risk monthly premiums and the different techniques for estimating country equity risk premiums this past year, when I made my mid-year update for the 2012 data. July 1 I am using my, 2013 estimates of the implied equity risk superior for the S&P 500 of 5.75% as my mature market high quality. June 2013 and applying the comparative collateral risk multiple to these spreads Upgrading the sovereign default spreads to, I get the up to date collateral and country risk monthly premiums for much of the global world.
You can download the spreadsheet that contains the equity risk rates by country by pressing here. A lookup has been added by me sheet to the spreadsheet, where you can choose the 135 countries that I have data and pull up sovereign ratings, CDS spreads, and my quotes of risk premiums. I am hoping you find it useful.