The MSCI World Index gained 0.9% this week, supported by European manufacturing PMI improvement. Tips on investing in global equities suggest rotating into cyclical European exporters as euro weakness could enhance profit margins. Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. However, he noted that some people prefer to screen out certain types of companies, like those focused on energy or weapons. Therefore, you should assess what your moral barometer is and how comfortable you feel investing in certain business sectors. The Nasdaq Composite reached a three-month high at 15,920, fueled by AI-driven companies reporting double-digit revenue growth. For investors seeking tips on investing, risk-adjusted positions in large-cap tech could outperform as global demand for cloud services expands faster than consensus estimates.
