Foreign Investments
Finance 400- International Finance
Foreign markets can be very attractive to investors because indexes in various countries around the world have managed a double or triple digit return on investments. Investors realize these high returns and pursue to invest in foreign markets. There are different ways to invest in foreign markets. There are three main ways to invest in foreign markets, Exchange traded funds (ETF) or mutual funds, American Depositary Receipts (ADR), and through multinational companies. You can also use the direct approach a buy stocks directly from these countries. It might not be an easy task however. You will need to contact your brokerage firm to see if they can provide such a task. Your firm then needs to contact a market maker from the country you seek to purchase the shares. Finding ways to invest in foreign markets might not be the highlight of your difficulties. You must also do your homework and understand the risks and complications with investing abroad. Laws and stock regulations in foreign countries might be different then the way they are here in the US. When investing in a different country you must research their tax laws for while your investing there and when you want to take your funds back home. You also must know that information might not be as convenient or accurate as it is in the US. The US gives investors current details and insight of native companies and how they are doing, as foreign countries might not do the same. There are five things every international investor should know. First you need to know the risk you take isn’t for nothing, there is potential for you to boost your returns dramatically. Know that a diversified portfolio helps decrease risk of loss and international diversification can enforce this even more. All investors should know that no time in the history of stocks has it been easier to invest internationally. There are many options and opportunities to get involved if you do your homework. A
Foreign markets can be very attractive to investors because indexes in various countries around the world have managed a double or triple digit return on investments. Investors realize these high returns and pursue to invest in foreign markets. There are different ways to invest in foreign markets. There are three main ways to invest in foreign markets, Exchange traded funds (ETF) or mutual funds, American Depositary Receipts (ADR), and through multinational companies. You can also use the direct approach a buy stocks directly from these countries. It might not be an easy task however. You will need to contact your brokerage firm to see if they can provide such a task. Your firm then needs to contact a market maker from the country you seek to purchase the shares. Finding ways to invest in foreign markets might not be the highlight of your difficulties. You must also do your homework and understand the risks and complications with investing abroad. Laws and stock regulations in foreign countries might be different then the way they are here in the US. When investing in a different country you must research their tax laws for while your investing there and when you want to take your funds back home. You also must know that information might not be as convenient or accurate as it is in the US. The US gives investors current details and insight of native companies and how they are doing, as foreign countries might not do the same. There are five things every international investor should know. First you need to know the risk you take isn’t for nothing, there is potential for you to boost your returns dramatically. Know that a diversified portfolio helps decrease risk of loss and international diversification can enforce this even more. All investors should know that no time in the history of stocks has it been easier to invest internationally. There are many options and opportunities to get involved if you do your homework. A
Bibliography: Abrams, J. S. (1998, Jun 26). The world of international investing: Going global adds to diversification of portfolio, but researching is vital. The New York Jewish Week. Retrieved from http://ezproxy.indstate.edu:2048/login?url=http://search.proqu est.com/docview/362609706?accountid=11592 Ahmed El-Masry, & Omneya Abdel-Salam. (2007). Exchange rate exposure: Do size and foreign operations matter? Managerial Finance, 33(9), 741-741. doi: http://dx.doi.org/10.1108/03074350710776262 Duan, Y. (2008). Essays in mutual funds and corporate governance. Boston College). ProQuest Dissertations and Theses, , 102-n/a. Retrieved from http://ezproxy.indstate.edu:2048/login?url=http://search.proqu est.com/docview/304689932?accountid=11592. (304689932). ETF MarketPro; ETF MarketPro launches online guide to investing with exchange traded funds. (2008). Computer Technology Journal, , 215. Retrieved from http://ezproxy.indstate.edu:2048/login?url=http://search.proqu est.com/docview/198339920?accountid=11592 Kim, Kenneth A. Global Corporate Finance: A Focused Approach. Singapore: World Scientific, 2011. Print. Kirman, A., Romain, F. R., & Richard LÉON Topol. (2007). Bubbles in foreign exchange markets. Macroeconomic Dynamics, 11, 102- 123. Retrieved from http://ezproxy.indstate.edu:2048/login?url=http://search.proqu est.com/docview/198644153?accountid=11592 Laderman, J. M. (1993, Jan 18). The power of mutual funds. Business Week, , 62- 62. Retrieved from http://ezproxy.indstate.edu:2048/login?url=http://search.proqu est.com/docview/236771454?accountid=11592