Globalization Strategies In Hollywood

Globalization Strategies In Hollywood Hollywood acts an important role in globalization and Americanization. Hollywood movies not only create the profit of economics, but also produce the global fun which is a form of Americanization. Meanwhile, Hollywood regards Chinese film industry as the most potential international film market. Obviously, Hollywood is drawing support from the strength of the US economics to extend market. After China has participated in WTO, Chinese film and the culture sovereign is confronted to the challenge. As a result, taking Hollywood an example would study the culture globalization and culture Americanization. Furthermore, it could benefit from successful Hollywood movies to find out the strategies of Americanization in order to develop the vitality of Chinese film industry. Current situation of Chinese style movies in Hollywood From Luise Rainer who patted locusts in movie The Good Earth in 1937 to Ingrid Bergman who put on bamboo hat in The Inner of the Sixth Happiness in 1958, and Tom Cruise had jumped down from a high building in Shanghai in Mission Impossible à ¢Ã¢â‚¬ ¦Ã‚ ¢, Chinese culture has affected Hollywood for more than seventy years. In 2008, Kung Fu Panda was coming. Obviously, it utilized more Chinese styles, but the whole film was produced by western teams and Hollywood patterns. Kung Fu Panda occurred in China, where have high mountains and lofty hills, indeed, it is like a traditional Chinese landscape paintings. Moreover, the roles in this film are also attracted audiences, such as the leading charactera lovely panda Bo and others like monkey, snake, tiger and red-crowned crane. All of these elements constitute this film which possesses the romantic charm with WuShu. It happens that there is a similar case, 2012 has showed in 2009. Some of the scenes have taken place in China. Due to the Chinese Peoples Liberation Army and civilians, human beings in the world could be rescued. Even though it is a story, it is no doubt that Chinese style is increasingly significant than before. From this view, Chinese style has two meanings which contain nature sightseeing and human flavor. On one hand, the wilderness in the west and the views which is charming and graceful in south of the Yangtze River constitute the nature sightseeing in Hollywood movies. On the other hand, from some westerns view, swordsmen films represent the typical model of Chinese culture. Therefore, in terms of Chinese style, the human flavor is another central issue of Hollywood. As some researcher has pointed out that film is like a specific culture product (Abercrombie and Longhurst, 2007), in fact, besides its material properties, films draw support from sounds, images, pictures and languages, these elements produce the symbolic signs and ideologies. Meanwhile, it connects with culture fields because films might shape to a sort of power which relates to collective values of society and the politic fields which includes culture intension. Obviously, the globalization in Hollywood has impacted Chinese domestic film industry. More importantly, it distributes American commercial, culture, politics, lifestyle and values to worldwide. Finally, Americanization will affect culture identity in order to achieve the future of world film industry. Due to that, the topic of Hollywood and Chinese film is emerging. Some concepts Globalization and Americanization In the previous articles, the concept of globalization was explained by which meant the expansion of European countries, thereby, achieving the global economics integration (Modelski, 2008). At present, this concept is quoted steadily which states that globalization represents a new phenomenon (King, 1991). Indeed, economic globalization is the core of globalization, and it consists of the multi- concept such as politics, culture, technology, military, security, ideology, lifestyle and the values. Americanization is not a new phenomenon. Even though Stead (1902) has stated that the concept of Americanization for more than hundred years, the real Americanization should be a kind of phenomenon in the middle of twentieth century. Storey (2005) brought up the features of Americanization is people who live all over the world drink Coco-cola every day, eat McDonalds, wear American style or the clothes which are made by America, see Hollywood movies and watch NBA, save and make use of dollars, speak American English, pay more attention to America no matter politics, economics and entertainments. Besides that, Americans export their values, ideas, policy and weapons to worldwide. After all, these features are only existed in studies; in fact, most of people all over the world even interested in Americanization. Above all, globalization is a kind of objective process; it describes the development of the world, as a result, it has undergone a deeply transformation. Although after 1990s, globalization has little changed by Americanization, the characters would not be altered. Americanization just limits the effect of communication in terms of American popular culture, in other words, it might transform the direction of culture in some countries which affected by American. However, Americanization could not completely influence. From this point of view, globalization and Americanization are two completely different notions. The former one is objective, and the latter one is a description of tendency which is in process. Culture globalization and culture Americanization Culture globalization is a kind of tendency which accompanied by the development of association. It seems that different culture exchange and culture identity has increased deeply, thereby, shaping the culture consistency which has the similar value and lifestyle. However, Crane (2002, p.2) stated that the best known model of culture globalization is cultural imperialism theory. Indeed, culture globalization has expressed two aspects (Gang, 2002). On one hand, at present, the content and the space of culture communication is increasingly widely, the acceptance of new culture and traditional one has risen gradually. From the previous development of human beings, due to the limitation of regions, communication of different groups were not active. However, accompanied by the technology and transportation, people in different places are more closed than before. In other word, people are not only confining the trade, but also developing religions and cultures. In general, the culture betw een different groups has already not restricted by region, meanwhile, the level of communication has enhanced. Therefore, globalization is concentrated on the phenomenon of cross-cultural exchange. On the other hand, every nation culture and region culture would reach an overlapping consensus. As I mentioned before, previous human culture had developed with geographical isolation, due to that, the culture difference is obviously. Firstly, globalization brings the circulation of capital, and then different nations would crash by different culture and values. These changes make people possess a wider horizon. As a result, people would adopt and improve their domestic culture, and they would tolerant with other different culture. In this process of seeking common ground while reserving differences, some advantages would be absorbed into the domestic culture system. By contrast, culture Americanization is a sort of phenomenon which makes American mass communication spreads to different countries in order to converge on domestic culture to American culture. It seems that this phenomenon tries to transform a multicultural society to a single culture. Compare to the definition of culture globalization, culture Americanization has changed a tendency which shapes some universal cultural characters, such as the assimilation of values and lifestyles into some specific tendency of American. However, the society of American has existed one kind of ideology. In general, due to the attraction of American culture, it has shaped a new former of global culture which concentrates on American values. Some researchers have upheld this point urgently and expect to achieve their wishes. Charles Krauthammer who is a columnist in Washington Post has written that it has no global mass culture before, therefore, the present culture is forming, and it is the specific American mass culture (Krauthammer, 2006). Hall (1991) argued that globalization is Americanization. It is determined by film and other culture terms. All of these points belong to mass culture, and American has the advantages rather than other countries. In fact, except American, there is no countries would like to become the reproduction of American culture. Culture Americanization has hit the point of researchers who want to product their domestic culture out of America. Some of them have overstated the influence of Americanization so that people are boycotting the cultural Americanization. Especially, few people have distinguished the concept of culture globalization and culture Americanization. Therefore, only understanding the basic notions of globalization and Americanization could study the American phenomenon, such as Hollywood more deeply. Successful reasons why Chinese style is so popular in Hollywood Kung Fu Panda has won the successful achievement no matter in China or in America. Audiences are intoxicated with the Chinese styles. Due to the shape, spirit and meaning, plus the creation, Kung Fu Panda is so popular in China and all over the world. Consequently, Hollywood producers have concentrated on Chinese style in order to attract audiences to appreciate Hollywood films. People feel that the distance of different culture has cut down. More specifically, someone has pointed out that the Hollywood production has overstepped the understanding of domestic culture for Chinese. The reason why Hollywood captured the marrow of Chinese culture is that Hollywood has developed the strategies in China. The Chinese film market in Hollywood eyes Due to China has amount of populations and the economics has grown, China has acted an important role in current society. Indeed, China possesses a significant position in terms of politics, economics and culture. When China wanted to join in WTO in 1999 ¼Ã…’film is an important topic. Because China always has limited foreign investment to enter the domestic film market, America expected Chinese government to admit more America film entering into China. Besides that, some America film company could invest and build new modern cinemas in China. On November 15th, 1999, China and America has reached the agreement which permits foreign company which invests 50 percent stocks engaging the cinema buildings and managements after three years. In fact, from 1920s, Hollywood had entered into China. During 1930-40s, Hollywood film had occupied 75 percent of Chinese market. More apparently, Hollywood was opened by Cecil B.Demille, Ernes Lubitscht and Mickey Mouse. To be honest, the direct result is that Hollywood has cultivated amounts of audiences. Most audiences in these year liked Mary Pickford and Douglas Fairbanks rather than Hu Die or Jin Yan. More interesting, some fans assorted Chinese and Hollywood stars in pairs. However, at that time, some directors also imitated the Hollywood. In 1934, Han Langen acted Song of the Fishermen, from that, he worked with Yin Xiucen so that copied Stan Laurel and Oliver Hardy. Until 1949, because China has embarked on an independent, self-reliance road, Hollywood films were stooped. Therefore, Hollywood faded out gradually the entertainment in China. After 1980s, when the reform and open policy has suggested in China, meanwhile, with the relationship between China and the whole world h as increasingly closed than before, Chinese culture industry brought the moment for Hollywood, and then Hollywood paid attention to China again. With joined into WTO and one fifth percent of population in the world, even though there are some limitations of laws, cultures and ideology, the Hollywood producers are even addicted to China. As for America, the culture industry in China has not been developed at all. Because China culture industry has not enough investments, technology and regular companies, American producers are so interested in it. Consequently, as for Hollywood, Chinese film market is not only a gold ore, but an undeveloped diamond ore. Almost 1.3 billion potential audiences in China is a temptation for Hollywood. Indeed, when the Chinese film market opens, it will supply a fresh export film market for America, more importantly, China will probably be the second film market in the world, which beyond Europe and Japan. More specifically, in the future, every four Hollywood films would have one subject for China at least. Due to develop the Chinese film market, Hollywood film companies started to research Chinese market in the middle of 1990s. Some of them had established Chinese department, others had employed Chinese students going back to China which assumed an important position. Every film company has got in touch with the organizations which managed films in China. In 1999, Twentieth Century of Fox Film Corporation received the Chinese film delegation. In 2000, Warner Bros. provided financial aids to China in order to hold Chinese Culture in United States in America. Moreover, all of film companies such as Metro-Goldwyn-Mayes (MGM), Paramount Pictures, Inc., Warner Bros., Universal Pictures Co., tried to imagine how to enter into Chinese film market. Larry Gleason who is the CEO of MGM said 55 percent of America film incomes were from out of America; meanwhile, China has the most population in the world, it is no doubt that Hollywood must enter into China. Developing the potential of Chinese mar ket will be the aim of MGM. In fact, the points of Larry Gleason have represented most of Hollywood companies. The strategies of Hollywood in China As a developing country, on one hand, China insists on the policy of reform and open, on the other hand, China should retain the socialist system. Due to the political environment of China, Hollywood might confront some barriers if it will get into Chinese market. First of all, Chinese government even keeps the film administrative limitation. Second, there are some differences between Chinese unique culture and Hollywood culture. Thirdly, Chinese film market is in disorder status. Because of that, Hollywood has a clear awareness. Therefore, from these years, Hollywood adopted sorts of strategies to try to overcome and reduce these barriers, thereby, preparing getting into China for maximum effect. Firstly, Hollywood expected to utilize America political power to expand their survival space. Moreover, Hollywood tried to invest and manage the film production industry, distribution industry and project industry, so that it could establish the Chinese film market. Thirdly, Hollywood want ed to take pictures which are acted by Chinese producers or actors or utilize the Chinese style in order to cater to the Chinese audiences. Finally, with other media formers, Hollywood tried to cultivate audiences to possess wider interests in Hollywood, thereby, developing the potential Hollywood market. In general, these strategies had been used in Hollywood history, and it gained the success. As for Hollywood, China is the second Europe, and it would be the new world from their expectation. From the views of promoting Hollywood, America government always acts the role of guard. As for a product, America government sales films to worldwide. Instead of how to make films, government would think about what should they do first in order to create condition for producing. In 1922, America film production has set up The Motion Pictures Producers and Distributors Association (MPPDA) ¼Ã…’this association has cooperated with government, thereby, striving for abroad benefits. After World War à ¢Ã¢â‚¬ ¦Ã‚ ¡, The Motion Pictures Exports Association of America (MPEAA) was built. This association was duty to address the external transactions. These organizations often kept in touch with the Department of Commerce. Obviously, political factors are always the reinforcements of Americanization. As a result, in the future, America government must strive for the rights through the politics. To some extent, Hollywood is a new force for Americanization. The second strategy of Hollywood globalization is investing other countries film industry in order to set up an organization which is duty to manage it, thereby, controlling foreign film market. In fact, when Hollywood occupied the Europe film market, the first step was co-production and distribution. At present, Hollywood tried to adopt the same method to enter Chinese film market. For instance, Hollywood needs make films with Chinese, on one hand, Chinese film produce system could be bring into Hollywood; on the other hand, it could make a similar pattern which based on Hollywood, and the audiences could be cultivated by the this new pattern film. Take Kodak for example, they once considered choosing one of five countries or districts where has the biggest potential of film industries, Chinese mainland is in it. Fortunately, they have chosen Chinese mainland because they believe film business opportunities in China are the best. Furthermore, Kodak has planned to build up 6 to 8 mod ern cinemas in Beijing, Guangzhou and other big cities. Besides that, Kodak initiated that they would show both foreign language films and domestic films in order to cater to the requirements of Chinese audiences. Consequently, the reason why Hollywood and other film companies would get involved with Chinese film industry is one of the strategies to enter into Chinese film industry. Through the history of Hollywood, it is very fruitful that Hollywood used foreign directors, actors/actresses and subjects to conquer the hearts of foreign audiences. On one hand, all of these foreign sentiments have poured Hollywood into cultural nutrition; on the other hand, it would bring the culture sympathy from foreign countries. To illustrate, Bruce Lee, Jackie Chan and Jet Li represent the Chinese style influences of Hollywood. This strategy has increasingly covered the brand of Hollywood. At the same time, it regards global film to enter into the Chinese film market. The globalization of Hollywood has not only limited the export of films. Every year, there is a grand ceremony in Hollywood which is called Oscar. Meanwhile, Hollywood is utilizing the auxiliary product of film, such as DVD, books, toys to expand the infiltration of Hollywood. In general, Hollywood has stared at the Chinese film market. For the strategies of globalization in America, Hollywood has not only opened up the second market which is inferior to America, but also weaved many America fables through the American love story and hero story. Therefore, Hollywood would conquer the foreign nations. Hollywood has altered the America to the world; meanwhile, the world is changing by America. Discussions The strategies of Americanization and films With the strategies of Americanization, culture industry, especially the film part is a significant chess for America. When culture has become an industry, the functions of economics and culture have overlapped. Indeed, the exports of cultural product have expanded the economic market, also gains the profits. At the same time, on one hand, these culture products could be sold by America lifestyle or values, on the other hand, culture is like a product and product would express culture, they are interaction. Due to culturae products have gained profits and they also create the meaning of advertisement, all of these elements which contain images, sounds, words, pictures and models have exploited the huge market of America politics and economics. As culturae products have its special meanings, America is making great efforts to be Americanization, especially the Americanization of Hollywood films. Early in 1930s, America government realized that film and other formers of mass culture not only possessed the meaning of industry, but conducted America culture, economics and politics. These mass culture and film would possess a priority function. The export of culture might affect other countries, districts and the awareness of nations, religions, culture even languages, in order to weaken their traditional culture, thereby, creating the memory of nation culture and promoting the mixture of America values and beliefs. Consequently, from World Warà ¢Ã¢â‚¬ ¦Ã‚  , America spread films, TV programmes, records and other mass cultural products to all over the world. During in World Warà ¢Ã¢â‚¬ ¦Ã‚ ¡, Hollywood became an important tool which helped the government conduct America. Films which become the most international media industry play a significant role in culture industry. To some extent, from beginning, Hollywood has spread America to the world and America movies possessed an international horizon. The first ten years of twentieth century, Hollywood producers have begun to set up offices out of America. From World Warà ¢Ã¢â‚¬ ¦Ã‚  , America films have replaced by France, British and Germany, became an international film market. From 1919, foreign film markets have brought into the budget of American films. After 1930s, the income of foreign film market already has accounted for one third to one half profits in total of American films. In other words, World Warà ¢Ã¢â‚¬ ¦Ã‚  and World Warà ¢Ã¢â‚¬ ¦Ã‚ ¡placed American films into the leader of the world in terms of economics and produce. After that, this priority position has not been wavered. Although the sound film had emerged, and the language barriers also had brought some threatens for American fi lms, Hollywood had adapted this method of art and technology changes, thereby, consolidating its powerful position. Until 1995, Hollywood films have possessed almost 75 percent of Europe box office income in total. Moreover, Hollywood even owns film market in Canada, Latin America, Oceania and Asia. Even though in Hong Kong where has been called Eastern Hollywood, American films have consolidated its domestic position. In the late of twentieth century, Hollywood has gained 7.5 billion dollars in America as well as over 6 billion dollars from overseas film markets. It became an important component in America new economics (Rao, 2009). After a half century of international efforts, nowadays, American films have been the world film and Hollywood is prevalent. Hollywood films no longer seemed only in America; instead, it became a byword for films. Consequently, America mass culture does not like an imports objective. Indeed, Hollywood has conquered the whole world, and we are becoming a Hollywood star. In the past ten years, due to commerce and military, the debate of information era and information society has become the main struggle of international politics, economics and culture. In fact, the competition of countries depends on information creation and the speed of circulation. Therefore, dominating the media is controlling the benefits of politics and economics. In other words, creating the media industry is producing the benefits of politics and economics. Due to this global competition, in many developing countries, culture nationalism is emerging. Consequently, because of the conflicts of nationalism and global tendency, how Chinese films would maintain its national orientation under the impact of Hollywood is becoming an inevitable thinking. From a higher level, this is a question which deals with globalization of Chinese culture. The vitality of domestic movies in China Even though Hollywood is a huge threatens for the domestic films, Hollywood would not become the gravedigger of domestic films, especially for China which has oriental culture for thousand years of history as well as suffered from vast disaster. As a matter of fact, Hollywood is impossible to replace the domestic culture in China. Even if in 1990s, Hollywood films had entered into China, it was still a number of domestic films had a higher market allotment in Chinese film market. For instance, in 2000, the income of Mulan and Notting Hill has less than ten millions, but the income of Chinese film Be There or Be Square has over 39 million (Rao, 2009), which had exceeded any of Hollywood films in that years. It seems that the domestic films in China are also having a place to live in after Hollywood is getting into China. The key point of Chinese film industry needs to exploit, cultivate and expand its advantages as well as reduce the disadvantage, thereby, strengthening the vitality o f domestic films. As for China, the Chinese films advantages could provide buffer of space, and they also require a kind of potential. For Chinese films, the most obvious advantage is China has a long history as well as the specific culture tradition. Though from 19 century, western culture has affected China, it also has a large difference between western and China in terms of lifestyles, values and languages. Due to that, film Star Wars which made a great sensation in Europe and United States has not accepted by Chinese audiences. Furthermore, the film Crouching Tiger, Hidden Dragon which was directed by Ang Lee was well liked by western audiences rather than China. These examples have showed that China and western countries even has existed the difference, it means Hollywood cannot replace the domestic films, in other words, Chinese films possess their special characters that Hollywood would never have. Therefore, if Chinese films may utilize Chinese traditional resources of culture creatively, the domestic films would occupy an important position in China even in Asia and Chinese culture space in the world. From another point of view, oriental culture tradition might provide a fresh cultural reference to western audiences, thereby, entering into the mainstream of Hollywood. More importantly, China has special condition. Compare to western countries, China is experiencing the transitional era, which transforms traditional society to modern society. Any of the transitional eras are the golden eras of the domestic films, in other words, the transition promotes society relations, interpersonal relations and family relations, due to that, the destiny and values have been altered. Indeed, the true life has provided the materials which are full of dramatic rather than drama as well as it requires much fresher life legend instead of stories. Thus, as for Chinese audiences, on one hand, they need Hollywood produce momentary of imagines; on the other hand, they also use film which is like a mirror to reflect the variation of soul. It should be said that from 1990s, such as The Story of Qiu Ju, Lovers Grief Over the Yellow River, The Treatment have fully utilized the domestic, actual cultural resources to reflect the situation at that moment. All of them are good at combing the social pictures, the ordinary civilians fate to the popular movie patterns. Not only expresses the experiences of transition eras, but also the desire of survival and wisdom, thereby, obtaining the audiences. Therefore, the domestic reality is the cultural superiority of Chinese films. According to the process of globalization, Chinese films also have a significance domestic superiority which is the potential film consumption market. Take Beijing for example, if resident see five films per year, it will reach 6 million RMB in total. Indeed, China has more than 12 million populations, if everyone sees one film per year, though the price is 5 RMB, the income of the whole year should achieve 60 million RMB. This income would support Chinese producers make the excellent domestic films. Moreover, China owns three hundred thousand employees and over hundred years film history, most importantly, there are amounts of talented person who are interested in films, all of these are the advantages of competition. Especially, because China has lower lever economics, the cost of films would less than Hollywood. Therefore, it would become an important strategy of contending for Hollywood. Above all, as I mentioned before, all of them should based on the root, once they come true, the fate of Chinese films would tend to be a bright future. Even though film which is a culture industry would not adapted by all market principles, if Chinese films would not run into market, Chinese films will not be paid attention by the world. Therefore, due to adapt to the market requirements, Chinese film industry must carry on the reformation of industrialization. Overall, Chinese films should make efforts from four aspects in order to open up the international space of Chinese films. First of all, China should establish film produce and distribution organizations which possess the international marketing, thereby, shaping a professional film enterprise. Furthermore, recruiting a number of film management persons who has professional quality of movie as well as carrying on the transitional economics. Thirdly, supporting film companies which produce films according to the requirement of international market, so that film companies could create the domestic film brands which are made in China. Finally, film companies should develop the products which are related to films, with TV, videos, DVD and networks to increase the added values. Conclusion It is no doubt that many people blamed the cultural invasion, even some pointed out that the whole world would be brought into the capitalism system which was hold by powerful capitalism countries. However, some researchers argued that globalization has affected domestic films. Obviously, with the development of globalization, the properties in different countries would not distinguish. When international films become an international culture, it is a risk of cultural environment. Indeed, Chinese film is confronting some challenges and threatens not only from Hollywood. Nevertheless, WTO and Hollywood are just providing an opportunity to refer. As for China, the domestic films must reform to themselves rather than imitating. More precisely, reformation is the only way to live and develop, otherwise, whether Hollywood entered into China or not, Chinese film has no way to go. Consequently, China should explore a kind of film industry and market which is suitable for the condition of China in terms of adapting Chinese politics, economics and cultural principles. The future of globalization not only means the choices of hegemony, but also obtains the equal rights of weakness. To some extent, the diversity of culture is the prerequisite of cultural vitality.

Essay --

Through the ages of United States, school dropout rate has been startling. Although. Historically, high school dropout rates have been steadily declining over past decades. 11.2% high school students dropout in 1994 which is 5.8% less in comparison to 17% dropout in 1970 (Debra Marguerite). Nevertheless, according to data in 2009, one- third of high school students nationwide do not successfully achieve a high school diploma and 1.2 million youths drop out each year-which translates into on dropout every 26 seconds (Enelida, 2010). Dropouts come disproportionately from low-income and minority families. Based on previous study, students from low-income families are substantial likely to leave school prematurely than their peers who is from higher-income family. In some communities, Africa American and Latino made up to 50% of the total dropout number. In fact, in 1970, 17% dropout rate did not constitute a social problem. It was relatively easier for those who dropout to seek adequate paid employment. In today’s social context, the consequences of leaving school without a diploma are more costly (Marguerite). Due to technology advancement, traditional goods-producing economy has transformed to a more service orientated economy. As the result, labor market for blue collar occupations has been shrinking in recent years. Based on Census 2000 data, a suburb of southeast Los Angeles County, California, where dropout rate was nearly 50%, 28% of its inhabitants are impoverished, which is twice the state average of 14%. Even before the financial crisis, nearly half of dropouts were unable to seek paid employment during an entire year. In additional to financial difficulties, high school dropouts are trend to become involved with justice ... ...t dropouts used to describe school life. The school was located in major drug-traffic area of a low income community which is literally one step away for those youth to go on street, engage gang activity and use drug. None of the teachers at Rosa Parks School were a part of the community in which they taught (Ferguson). The sad, shock stories school adults told were based on prejudiced judgment associated with children’s behavior at school, children’s failure as largely the consequence of their attitudes and behaviors as well as those of their families (Ferguson). Families of at-risk children are asserted as lack parental skills; they do not give their children the kind of support that would build â€Å"self-esteem† necessary for school achievement (Ferguson). Faculty should communicate and spend quality time with parents; it helps both sides to understand.

If I Could Live Here!

If I could live in one place out of the country I probably would have to say I would live somewhere in Italy, either in Rome, Venice, or Tuscany. I have always admired Italy because of its beautiful scenery and the magnificent architecture. If I were to live in Italy I would not live in the big city even though it is full of wonderful adventures around every corner and the buildings are magnificent I would probably end up living somewhere out in the country side because of the scenery that is there. All of the antique houses and the magnificent vineyards are just simply breathtaking. If I were to live in Rome, Italy I probably would live in the city because that is where all of their architecture is like the Colosseum, or the Trevi fountain, or Saint Peters Basilica. I would love just waking up in the morning and looking out of my window and seeing these magnificent buildings and being able to enjoy the nightlife. If I were to live in Venice I would probably also live in the city but I would live along the canal because I love the way it looks during the day and night when you are along the canal and the soothing sound of the water. I would also like to live in Venice because of the boat rides that you can take around because I think that would be a fun way to get around anyplace that you go. And if I lived in Tuscany I would defiantly live in the country because the scenery there is simply breathtaking and I would own a small little vineyard and live in a cute little antique house. I love the idea of living in the country because it just looks amazing in the morning at the break of dawn and at sunset. So as you can probably already tell Italy would be my ideal place to live because I just love it. Because not only is it remote and you can stay out of the busyness of the city and go live in the country if that is what you like. But if you like living in the city and seeing all of the architecture. And that’s what I like about Italy is its versatility.

Active Fund Management - Free Essay Example

Sample details Pages: 6 Words: 1917 Downloads: 3 Date added: 2017/06/26 Category Management Essay Type Analytical essay Did you like this example? 1. Introduction Investors, by their very nature, wish to achieve good returns on their investments, and that too, mostly without taking disproportionate risks. This, unfortunately, is an inherently contradictory desire as high returns are always associated with greater risk. Don’t waste time! Our writers will create an original "Active Fund Management" essay for you Create order The current economic scenario provides investors with a number of alternative avenues for growing their assets, which, inter alia, include real estate, bullion, land, art, bonds, bank deposits and of course equity. Equity markets have, in particular, fascinated investors for decades with their promise of huge profits, â€Å"killings† and stories of fortunes built from nothing. Most of these stories, which deal with huge trading profits made by individuals, are of questionable authenticity and anecdotal in nature; nevertheless, they serve to engage the attention of investors and keep their hopes alive through boom and bust times, through depressions and terrorist attacks. In recent years, the activity of investing in equity markets has become increasingly complex and most people have started trusting in the services of specialist organisations that operate through pooled funds; which contain monies contributed by numerous clients. Barclays, the leading global asset management f irm controls assets worth more than 1400 billion dollars.[1] These funds charge fees from their members and employ trained and experienced managers, who are conversant with equity and bond markets and focus solely on optimising the monies entrusted to them. Most fund managers are recruited with care, trained extensively and paid handsomely by their employers. These funds, widely known as Mutual Funds, have a variety of schemes for the benefit of their clients. Mutual funds are often categorised by investment policy. Major policy groups include money market funds; equity funds, which are further grouped according to emphasis on income versus growth; fixed-income funds; balanced and income funds; asset allocation funds; index funds; and specialized sector funds [2] It is the objective of this essay to analyse the functions and methodologies of actively managed funds, with reference to other modes of equity investment, and determine whether their inclusion, in the portfolio of risk-averse investors is desirable. Active fund management refers to a strategy wherein fund managers actively pursue objectives of outperforming specified benchmark indices; in other words they aim to provide returns better than what the market can theoretically give to investors. Active funds, like other mutual funds levy a host of charges on investors that are payable at entry, exit and during the time investors keep their money with them. Fund managers use an assortment of means to achieve their targets, which include the use of ratios, specific sector bets, short selling, use of market inefficiencies and investments in small cap stocks. In a number of cases these measures entail a significant amount of risk. Losses, if and when they occur, are borne by the investors, mostly through the Net Asset Value (NAV) mechanism. 2. The Methodology and Risks Associated with Active Fund Management Actively managed funds are among the fastest growing funds worldwide and increasing num bers of investors are putting their financial assets in the hands of fund managers. Researchers have actively worked on the various mechanisms involved in actual fund management, not only to assess their methodology but also to ascertain their level of success. Studies generally indicate that active funds rarely outperform index funds over sustained periods of time even though there may be phases when they are significantly ahead of index funds. If the cost of fund management is factored into the scheme of things there is a real possibility of the return from actively managed funds not being commensurate with the risks involved; in such case it is difficult to understand how active funds are able to attract so much capital. One school of thought states that the returns from actively managed funds depend upon the quality of fund managers and well managed active funds are able to regularly outperform index or passive funds. However, active management, when thoughtfully executed, ca n potentially add value relative to a static asset allocation implemented through index funds. Investors and their advisors can maximize a portfolio’s potential for alpha by selecting talented managers with low costs and incorporating them into the portfolio in a manner that does not sacrifice control of systematic risk factors.[3] This theory about performance of actively funded funds being dependent upon their management is empirically borne out, to a certain extent, because of the superior long-term performance of some actively managed funds. However, the variables associated with the equity market, the inherent unpredictability of individual share and collective market behavior and the extent of factors that can influence the market, and which remain beyond the forecasting ability, knowledge and control of active fund managers, make such claims untenable. Active fund managers use the help of statistical forecasting tools, fundamental and technical analysis, accepted ma rket models and established stock market theories to make their portfolio decisions. Individual judgmental decisions are seldom, if ever, used. The efficient market hypotheses and the use of the Capital Asset Pricing Model (CAPM) are some of the important theories that help in explaining the nature of equity markets Efficient Market Hypotheses The efficient market hypotheses have three sections, the weak form, the semi strong form and the strong form.[4] The weak form postulates that prices of shares reflect all information in past and current prices and transaction volumes, thus making movements unpredictable and the chances of making profitable trades just about even. The semi strong form goes a step further to state that prices have already factored in additional information such as company and industry data, as well as broad economic data including interest and currency fluctuations and inflation. These two hypotheses, in effect, state that as current share prices factor i n all the variables used in technical and fundamental analyses, future movement is inherently unpredictable and investment decisions of fund managers nothing more than shots in the dark. Finally the strong form hypothesis states that all information, public and private is reflected in share prices. This is possibly an untenable hypothesis as there may be a number of facts available with the management that may not be available with market operators. A case in point is Enron, where a great deal of inside information, available with the management, was not passed on to the market, enabling the top management to use the undisclosed facts to their advantage. While the efficient market hypotheses rule out the possibility of predictability in stocks, analysts believe this is only partially true and the hypotheses do not address the issue of market momentum, wherein groups of stocks do show the tendency for unilateral predictable movement, a fact that can be used by fund managers to inc rease returns on investments. Capital Asset Pricing Model (CAPM) The CAPM was conceptualised by William Sharpe as far back as the early sixties and has since evolved into one of the chief models for managers to control risks while taking investment decisions. It is an equilibrium model that describes the pricing of assets as well as derivatives. The CAPM is the single most used model for valuing securities and uses the Discounted Cash Flow system with risk adjusted discount rates. The CAPM postulates that entry into markets opens investors to two types of risks, systematic risks that arise from just being present in the market, and unsystematic risks, which arise from investing in particular companies. As unsystematic risks can be controlled through a process of diversification, the main risk in portfolio decisions comes from systematic risks.[5] The use of CAPM and other models like the Arbitrage Pricing Theory and Black Scholes provide alternative tools for fund managers to tackle risks and make informed and calculated investment decisions. It is evident from the foregoing analyses that most investment decisions associated with active fund management have significant elements of risk. In most cases, except when fund managers are privy to information that is unavailable to the market, the probability of profitable decision making is not more than even, and it is possible for results to go either way. The only time when chances of profits are relatively high relate to working in equity markets that have gained momentum. Even in momentum led markets, while the movement of a group of shares can be predicted, it is difficult to do the same for individual shares. 3. Analysis and Conclusion Existing theories on market hypotheses make the point that both fundamental and technical analyses do not provide credible tools to fund managers to help them in making profitable investment decisions. Profitable decisions are facilitated mostly when fund managers have access to information unavailable to the market or operate in markets that have generated significant momentum. Such opportunities however, arise very occasionally. While use of CAPM and other existing models help in constructing risk controlled portfolios, the risk of remaining in the market is permanent and cannot be eliminated. These facts are corroborated to a great extent by the fact that actively managed funds have been outperformed by indices regularly for the last fifteen years.[6] Index funds invest in a selection of equities that comprise the index. Their performances are similar to that of the index. They, however, trail the index marginally in returns because of the associated transaction costs. The costs of index funds are however much less than that of actively managed funds and with most active funds trailing the indices, the rates of return of actively managed funds are significantly lower than those of index funds. Prima facie, there appears to be very litt le reason for the risk-averse investor to invest in actively managed funds. Statistically, their average performance is poorer than that of index funds, their costs are significantly higher and risk profiles obviously greater. Risk-averse investors might still however wish to participate in the far higher returns that some actively managed funds are achieving, especially in the current climate of economic buoyancy. These investors can consider two alternatives. First, investors could choose actively managed funds that have an extended history, i.e., more than five years, of outperforming indices. This is a judgmental decision and does not guarantee future performance. Second, they could opt for funds which operate on a core and satellite system. These funds have a core portfolio of index funds that help in reducing the risk factor considerably. Deployment of the satellite funds is through active fund management and is subject to greater chances of risks and profits. This could be a suitable avenue for risk-averse investors who wish to control risks, but aim to increase their return. Bibliography Active Fund Management and Investment Strategies, 2006, Investment Management, Retrieved November 14 2006 from www.londonexternal.ac.uk//lse/lse_pdf/further_units/invest_man/23_invest_man_chap3.pdf Bodie, Z, Kane, A and Marcus, 2005, Investments, McGraw Hill, USA Burton, J, 1998, Revisiting the Capital Asset Pricing Model, Dow Jones Asset Manager, Retrieved November 12, 2006 from www.stanford.edu/~wfsharpe/art/djam/djam.htm Investment funds from Barclays Global Investors, 2006, Retrieved November 12, 2006 from https://www.bgifunds.com Levy, H, 1996, Introduction to Investments, South-Western College Publishing, USA Wicas, N, 2005, Add active ingredients to spice up passive portfolios, Professional Wealth Management, Retrieved November 12, 2006 from www.pwmnet.com/news/categoryfront.php/id/75/ASSET_ALLOCATION.html Lofthouse, S, 1994, Equity Inves tment Management: How to Select Stocks and Markets, John Wiley and Sons, Inc. Bottom of Form 1 [1] Investment funds from Barclays Global Investors, 2006, https://bgifunds.com [2] Bodie, Kane and Marcus, 2005, Investments, Ch. 4, [3] Wicas, N, 2005, Add active ingredients to spice up passive portfolios, Professional Wealth Management [4] Active Fund Management and Investment Strategies, 2006, Investment Management, [5] Burton, J, 1998, Revisiting the Capital Asset Pricing Model, Dow Jones Asset Manager [6] Wicas, N, 2005