The Impact of Stocks

Outside the U. S. the stock markets have been flourishing. Stock markets in Europe have remained competitive since the region’s economy has been upbeat. The emergence of the European Union as both competitor and partner of the U. S. is critical. These stock markets have increased their exposure from investment banks outside the region. Aside from Europe, stock markets in Asia are also well established. The markets in Japan, Hong Kong, and Singapore are considered as staple sources of revenues. In addition, the emergence of China’s stocks market is causing changes in the stock spectrum.

The balance of capital in the world has become more balanced. Another reason for Fidelity Investments’ transition is the generation of revenues. As a capital firm, Fidelity needs to acquire modicum amount of profits to remain competitive. Aside from the gains from mutual funds and other fees, Fidelity Investment has to devise other ways to increase its earnings. Fidelity Investments’ strategy extends to the possibility of gaining more profit. The company also thinks that stocks will allow it to become owners of other public firms.

Stocks serve as the ownership proof by Fidelity Investment on some firms that publicly trade their stocks. Further, Fidelity Investments decided to venture into the stock market because the increasing initial public offering. Companies have considered going public as the best way to gain capital. Hence the market continues to expand because of the presence of these firms. The increasing number of firms becoming public ensures that stock markets will remain. This means that stock markets are long-term investments for Fidelity. The Impact of Stocks

The most evident effect of the transition was Fidelity Investments’ increased earnings. Since venturing into stocks, the company has experienced substantial growth in terms of revenues and profits. In 2003, the revenues of the company have reached $9. 2 billion. This figure has increased in the next three years when Fidelity Investments recorded earnings of $10. 5 billion in 2004, $11. 1 billion in 2005, and $12. 87 billion in 2006. Of the earnings in 2006, $1. 18 billion was translated into profit. The positive change in revenue shows the prospects that Fidelity Investments has in the future.

Since Fidelity Investments moved to stocks, the number of its investors have increased immensely. At present, the company caters to the needs of some 20 million investors. These investors either operate in the U. S. or in other markets in the world. In addition, the company has expanded its funds to 300 making one of the biggest in the world. In 2005, the assets managed by the firm rose to $1. 2 trillion. Overall, the total assets managed by Fidelity Investments amount to approximately $3 trillion. Although the bulk of these assets are mutual funds, a substantial amount represent stock ownerships.