Foreign Investment: 6 Facts You Need To Know
Investing is a great way to make more money than what you put in–if you have patience, expertise, and luck. If you’ve experienced success in domestic markets, it might be time to expand your horizons. Foreign investments can yield even greater returns than you ever thought possible, so don’t restrict your money-making potential by limiting who you’re willing to do business with. Here are six things you’ll want to know before taking the plunge.
1. You can earn a lot more
Most investors focus on the U.S. market because it is the largest in the world. However, that doesn’t mean that the U.S. stock market is always doing well. Even the biggest corporations go through rough times, so stocks can rise and fall in price very suddenly. Other markets around the globe may offer greater returns when the domestic one is under-performing, so don’t miss out on some great investment opportunities.
2. You may increase your chances of success
The general public has the perception that investing internationally is more risky than staying within the borders. That’s not always true. In fact, you’ll be more likely to cushion a financial blow with a more diversified investment portfolio because when the U.S. market isn’t looking so hot, foreign ones usually do and vice versa. Understanding the ins and outs of each market and current events will help you to in turn understand the fluctuations in the markets and how they shift.
3. It’s much easier for private investors to go foreign nowadays
Foreign investing used to be more exclusive to professional investors, but that’s certainly not the case anymore. International investments are now more accessible to regular people thanks to ETFs, ADRs, and more–and a computer is all you need to play.
4. Be aware of exchange rates
Trying to buy dinars could be a smart move for an American investor, but not always. When there is a large change in the exchange rate between a foreign market and the U.S. market, you could see huge differences in the result of a foreign investment. This could be for better or for worse. History suggests that when the U.S. dollar is strong, your returns in foreign markets won’t be so great over time. So if you want to buy dinar, now would be the time. The U.S. dollar is weak making this the perfect to invest and see a great payout.
5. Don’t forget the tax laws
Depending on what you’re investing in and where, there might be taxes involved–and lots of them, in some cases. Your returns could be minimal after heavy taxation, so speak with a tax professional to get a better understanding of what you’d be getting yourself into before investing in a particular market.
6. You win some, you lose some
Whether domestic or foreign, you won’t profit from every investment. Nobody wins all the time. Always be prepared to take a hit, and never put all your eggs in one basket. Also, put in the time and research your options and possibilities.
Economies all over the world are growing faster than we can imagine. There are endless possibilities out there if only we allow ourselves to explore those options. When it comes to investing, the sky is the limit.
Brionna Kennedy is native to the Pacific Northwest, growing up in Washington, then moving down to Oregon for college. She enjoys writing on fashion and business, but any subject will do, she loves to learn about new topics. When she isn’t writing, she lives for the outdoors. Oregon has been the perfect setting to indulge her love of kayaking, rock climbing, and hiking.
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Category: Investing
