| |
| |
|
|
|
|
|
How to Invest Overseas - Intelligently!
In recent months, many advisors have talked a lot about the wisdom of investing overseas, but most have failed to really address the way to do that. For new investors, investing in the U.S. is challenging enough, but investing across borders is often even more daunting. Many major issues need to be addressed, but the first step is deciding how to buy and sell. Here are some possibilities: 1. Direct purchase in foreign markets. The most straightforward way to invest in foreign markets is by buying shares directly in the regional or national markets. This approach has some drawbacks, however. First, one must buy through an account with a broker who is registered in that nation. For Canadian shares, this is relatively easy, since many U.S. brokers connect with the Toronto exchange. But going beyond that zone leaves us with few, and expensive, choices. Plus, shares on many foreign exchanges are not subject to the same reporting requirements as those on the NYSE or even the NASDAQ. Thus, we may not know enough about the financial status of many international companies available in this way. Also, since these shares sell in foreign currency, we must calculate all the exchange rates. 2. ADR's. American Depository Receipts are foreign stocks (actually, certificates representing those stocks) selling on American markets. As such, they are required to fulfill all the reporting requirements and laws that U.S. stocks are, and hence are much more transparent. Plus, the shares are priced in U.S. dollars, simplifying the purchase process. ADR's are the most common method for American investors to invest in foreign stocks, and include a number of the names I have recommended in the past, including Unilever, Telefonos de Mexico, America Movil, Korea Electric, Canon, Nokia, and Bancolombia, among others. 3. American multinationals. An even simpler way to play foreign markets is to invest in American companies that do business overseas. Companies like Apple, Coke, and Procter & Gamble do almost as much business around the world as they do here in the U.S. 4. International mutual funds. Mutual funds simplify the process of investing overseas. A buyer can purchase one fund which may hold dozens of different stocks that the fund managers have researched. 5. International Index Funds: Exchange Traded Funds, such as iShares (formerly known as WEBs), are benchmark indices of foreign markets. Buying an index allows one to gain from a wide market rather than trying to research individual stocks. 6. Closed-end Country Funds. Like the index funds above, country funds focus on a particular market. The difference is that these funds are actively managed, and may often be available at a discount to the value of their shares. If one watches carefully, one can occasionally take advantage of great deals in these shares, which trade just like stocks. Some examples are the Swiss Helvetia Fund, the Brazil Fund, or the New Ireland Fund. Closed-end funds may also be available that invest across national borders, such as the Emerging Markets Telecom Fund, the Templeton Dragon Fund, or the Latin American Discovery Fund. In the end, there are many ways to invest internationally. Use good judgment, but be sure to take advantage of the opportunity to diversify across borders. One thing is for sure: there's no longer any excuse for keeping all your eggs in one (national) basket. Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S. Scott Pearson can be reached directly at Scott@valueview.net or by visiting www.valueview.net
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Going Against the Conventional Investment Wisdom First of all, I want to give everyone the disclaimer that I am not a registered financial advisor and I don't play one on TV. Therefore, I cannot legally provide financial advice and I will not do so. The Real Cost of a Bad Habit What is the value of a good habit? Think of some daily habits, like brushing your teeth, or buckling a seat belt, or flushing. All of these habits have value important to some part of life. Investing 101: Risk Terminology - BETA About thirty years ago, statisticians armed with all of their statistical theories began to confront the financial markets. A handful of useful tools emerged that the average investor should be familiar with when they look to purchase stocks. What Age Should I Start Saving For Retirement? Ask this question to 100 people and you will receive 100 very different answers. The fact of the matter is there is no right age to start. Rules for Simplified Employee Pension Plans better known as a SEP Plans A SEP is a special type of IRA. Under a SEP plan the employer creates an IRA account for each eligible employee, hence the name SEP-IRA. Making Your Investment Dollars Work for You Investments are scary for some people, especially those who have never invested before. We grow up hearing horror stories about how this person or that person lost everything they had on some bad investment some odd years ago and it builds in us a fear of investing so profound that it is sometimes easier to get a confirmed agoraphobic to march in the Macy's Day Parade than it is to get someone to put a few dollars into stocks or mutual funds. An Economical Retirement Investment Plan The practice of economy, directed toward a retirement investment plan in the stock market, is in itself a source of great revenue. It is the art of making the most out of every stock market investment, with the definite purpose or goal being to provide a life that is fully independent of monetary concerns. Ask The SEC Who is the SEC and why should I ask them anything? The Securities and Exchange Commission in Washington, DC is the government bureau that regulates the securities industry. They make the regulations that all stock exchange listed companies, brokerage houses and mutual funds must follow. Financial Planners "Financial planners are like dentists: they may occasionally inflict pain, but in the end, you will be better off for following their advice!"Whoever wrote these lines must have either been a financial planner or someone who relied heavily on planners for finance management. We all know that planning our finances is vital. Hedge Fund 101 - Make Money with Hedge Funds Investors are always looking for the best investments that will yield the most profit. Any investor who can afford the extra cost should consider investing in Hedge Funds. Your Portfolio and "Old Ironsides" The USS Constitution first ventured into the waters in 1798. From there she became an icon of durability and success. Finding a Broker "Hey Joe! I need help finding a broker. I notice that discount commission rates are pretty much the same. Annuity Investment Guide While there is not a lack of information on annuities, there certainly is a lack of good information. In an age full of information, we are constantly bombarded with irrelevant data. Critical Options Investing Tip When Trading Naked Calls and Puts An option is a derivative trading product that is best used by investors as a hedging tool providing investing profit protection and profit enhancement. Although it is a powerful risk management tool, it can also be used effectively as a stand-alone trading vehicle. Is Offshore Banking for You? You've probably heard about people who keep their money offshore. Most likely you assume they're all wealthy businessmen; millionaires, who have so much money they somehow 'qualify' to move it out of the country, right? Wrong! Offshore banking can be a benefit for anybody regardless of income. The High Price of Oil In less than four years, the price of oil has risen about 300%, or over $50 a barrel. The Light Crude Continuous Contract (of oil futures) hit an all-time high at $67. Coca-Cola - A Value Stock? There has been much talk lately about Coca-Cola and its potential as a value stock - as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the late 1980s) and a P/E or less than 21 - right at the bottom of its five-year low. How to Buy to Let Find out everything you need to know about buy to let. Learn what to buy, where to buy and what not to buy. Tyranosaurus Rex Everyone knows T Rex was the most fearsome of all dinosaurs. He could and did kill everything in his path for food or maybe stupid meanness. How to Terror-Proof Your Money "To drift is to be in hell, to be in heaven is to steer." -George Bernard ShawFormer Homeland Security Director, Tom Ridge, has said it's not a matter of "if" we'll have another terrorist attack, but when.
|
