Hot money: A worthy economic indicator

As its definition goes, hot money moves regularly and quickly between financial markets so investors are sure they are getting the highest short-term interest rates available. Despite its nature of being a “short-term” investment scheme, hot money flow reflects the level of confidence due to measures the new administration taken since it started last month.

Hot money flow reflects the level of confidence due to measures the new administration taken since it started last month.

Hot money mainly comes from foreign portfolio players whose intention is to adopt a wait-and-see attitude on economic stability (or instability). Depending on their perception of the local economic strength, they would either pull out their portfolio or convert it into a more participative investment better known in business parlance as “lock, stock and barrel,” known to be more permanent in nature. 

Article by Emmanuel J. Lopez, Ph.D. Full article at https://www.philstar.com/business/2016/08/26/1617493/hot-money-worthy-economic-indicator