Beginner’s Guide to Investing in Foreign Stocks
Did you know stock markets around the world are getting close to hitting record highs this year?
If you’re an investor that only invests in US stocks, you might want to invest in foreign stocks too. After all, if you figure out how to do this, you can benefit from this surge in global stock market growth.
This post will provide you with a beginner’s guide to investing in foreign stocks. If you use the information in this post, you should end up with a portfolio that provides better returns.
How Can You Buy Foreign Stocks?
Most trading platforms let you buy stocks from various stock markets around the world.
That said, if you want to buy a specific international stock, you first have to identify where the stock is actually listed. For example, is it on the FTSE100, or is it on the Nikkei 225 index?
Once you know where a particular stock is listed, you just need to find that stock market index within your chosen trading platform.
After finding the correct index, you should then see the name of the company you want to invest in.
It’s worth noting that some platforms might not cater to all international markets. Thus, if you can’t find a particular index within your current platform, you’ll need to choose another platform.
If you see a promising trading platform, you’ll need to verify if it can actually provide you with access to a particular foreign market.
Fortunately, this isn’t that hard to do, as most trading platforms, such as monexsecurities.com.au, are quite open about the regions they cater to.
Which Stock Should You Buy?
Now that you know how to invest in foreign stocks, you might be wondering how you can identify a good opportunity in a foreign stock market.
In most cases, this generally comes down to doing the same things you’d do when searching for a good ‘domestic stock.’
For example, you need to identify the profitability of a given company, and whether they have a future.
You can often do this by reading news reports on a particular company. You should also try to read ‘shareholder letters,’ as this can help you determine what the leadership team is planning.
You might also want to sign up for newsletters that highlight good international stock opportunities. Note that sometimes you will have to pay for these newsletters, but this expense is typically worth it.
That’s because if the newsletter provides you with a good tip, the returns you make will easily cover the cost of the newsletter.
Do You Understand the Basics of Investing in Foreign Stocks?
Investing in foreign stocks can seem like a daunting concept, but hopefully, you should now see that the process isn’t as scary as it seems.
Because the global stock market is surging right now, you might feel a lot of pressure to quickly invest in something. However, while this is a tempting option, it’s critical that you don’t go down this route.
After all, if you do this, you might end up making a bad investment, and thus investing in global stocks may actually leave you in a worse position.
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