WiserAdvisor – Blog

Main Menu

  • Home
  • Financial Advisor Guide
  • Financial Planning
  • Retirement Planning
  • Education Planning
  • Estate Planning
  • More
    • Personal Finance
    • Portfolio Management
    • Financial Trends/Government

logo

Header Banner

WiserAdvisor – Blog

  • Home
  • Financial Advisor Guide
  • Financial Planning
  • Retirement Planning
  • Education Planning
  • Estate Planning
  • More
    • Personal Finance
    • Portfolio Management
    • Financial Trends/Government
Financial Planning
Home›Financial Planning›Should You Invest In Foreign Stock Markets?

Should You Invest In Foreign Stock Markets?

By WiserAdvisor Insights
August 13, 2019
736
0
Share:

Last Modified on September 25, 2019

The value of the total global stock market is around $68 trillion. According to reports, foreign stock markets may outperform domestic stock markets in the coming decade. Such an analysis might urge several investors to look at investing in foreign stock markets and make suitable changes to the allocation of their funds. Wondering what are the factors that one must consider before investing in foreign markets? 

Top 7 Things to consider before investing in Foreign Stock Markets

1. Diversification – a key benefit of investing in foreign stock markets

Diversification is an important factor for creating a strong investment portfolio. Investing in foreign stock markets can help you diversify your investment portfolio. The reason is quite simple. It is wise to spread out the risk and not invest all the money in one market. Many financial and investment experts are of the opinion that not investing in stock markets outside of one’s economy means missing out on numerous investable stocks. Investing overseas can be a good way of investment diversification and reducing risk.

2. Unfamiliar terrains can be risky

If you are unfamiliar with the market and economy of a certain region or country, it is better to avoid investing in there. Investments require a certain amount of knowledge and understanding of the economy. A lack of either could be highly risky. A smaller investment allocation may be advisable for those considering investing in unfamiliar markets.

3. Possibility of high risk and high return

Whether one must invest in foreign stock markets depends on their appetite for risk. It also depends on the strategy and plan for their investment portfolio. Foreign stocks could turn out to be highly risky. At the same time, they can also bring high returns. Wondering how? Since the economies of different countries perform differently, it could be beneficial to invest in the stock market of a particular country when its economy is doing well. 

4. The difference in the value of currencies can affect returns

When the currency of a particular economy depreciates in comparison to the currency of the economy in which one has invested, it could bring in profitable returns. The situation would be the opposite if the currency appreciates.

5. Tax – a key factor

Tax is a key factor to consider when investing in foreign stock markets. Different countries have different taxation rules. It is better to understand the effect of tax on returns that you may earn before investing. To reap maximum returns, it is advisable to consult investment advisors who are familiar with international stock market investments. Just like tax, inflation too can affect your investments. Calculate how taxes and inflation affect your investment here.

6. Moderation in investing

A number of financial experts suggest moderation while investing in international markets. About 15% to 20% of investment in foreign markets is a good place to be in. It is good enough to make a difference to your investment portfolio and at the same time, it is not too risky. As you get comfortable with international investments, you can gradually increase your investments. 

7. An evenly balanced international portfolio

Financial advisors suggest balancing international investment portfolios by investing in the stock markets of different countries and regions. As economies of all countries perform differently, the chances of losses and gains balancing out each other are higher when invested in different stock markets.

To sum it up

Strategic investments in foreign stock markets can be profitable, as long as you keep certain factors in mind. The key is to be well-balanced, well-diversified and well-informed all the time. 

Are you an investor keen on exploring international stock markets for investing? Reach out to financial advisors for their guidance and advisory services.

TagsInvestingPortfolio ManagementSavingStock markets
Previous Article

Shedding Light on The Myths of Retirement

Next Article

The Best and Worst States to Retire ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0
WiserAdvisor Insights

WiserAdvisor Insights

A team of dedicated writers, editors and finance specialists sharing their insights, expertise and industry knowledge to help individuals live their best financial life and reach their personal financial goals. We believe that there is no place for fear in anyone's financial future and that each individual should have easy access to credible financial advice.

Related articles More from author

  • Investment-Strategies
    Financial Planning

    Tips for Dealing with Failed Investment Strategies

    April 2, 2020
    By WiserAdvisor Insights
  • Investment-Plans
    Financial Planning

    Different Age Groups, Different Investment Plans

    September 2, 2019
    By WiserAdvisor Insights
  • Economic-Bubble
    Financial Trends/Government

    Economic Bubbles: Everything you should know about them

    October 6, 2019
    By WiserAdvisor Insights
  • Do's & don't Financial planning
    Financial Planning

    The Dos and Don’ts of Financial Planning

    August 28, 2019
    By WiserAdvisor Insights
  • Investment
    Portfolio Management

    How to Improve Your Investment Portfolio in 2021

    January 4, 2021
    By WiserAdvisor Insights
  • Emergency-Fund
    Financial Planning

    What should every 50-something know about an Emergency Fund

    August 19, 2019
    By WiserAdvisor Insights

Leave a reply Cancel reply

You might be interested

  • Investment-Sucess
    Portfolio Management

    7 Factors You Must Remember to Ensure Investment Success

  • short-term
    Financial Planning

    How to Invest for Short-Term Goals within the Next 10 Years

  • Kids education
    Education Planning

    5 Common Ways Parents Save For Their Kids’ Education

  • Popular Posts

  • The benefits of working with a financial advisor - WA

    The benefits of working with a Financial Advisor

    By WiserAdvisor Insights
    July 16, 2019
  • retirement-accounts

    Choosing the Best Retirement Accounts

    By WiserAdvisor Insights
    July 8, 2019
  • financial planning DIY-Checklist

    How to Prepare an Annual Financial Plan – Financial Planning DIY Checklist

    By WiserAdvisor Insights
    June 10, 2019
  • IRAs-Work-401

    How IRAs work? 401k vs IRA

    By WiserAdvisor Insights
    July 4, 2019
  • Retirement-Planning

    Retirement Planning checklist

    By WiserAdvisor Insights
    July 8, 2019
  • Financial-Advisor

    Why and When do you need a Financial Advisor?

    By WiserAdvisor Insights
    July 8, 2019
  • Financial-Professional

    How to prepare for a meeting with your Financial Advisor

    By WiserAdvisor Insights
    July 8, 2019
  • monitor your financial advisor

    How to monitor the activities of your Financial Advisor?

    By WiserAdvisor Insights
    July 16, 2019

Don't miss out! Get our Helpful Financial Tips Newsletter

Categories

  • Business Finance (2)
  • Education Planning (23)
  • Estate Planning (16)
  • Financial Advisor Guide (14)
  • Financial Planning (92)
  • Financial Trends/Government (2)
  • Personal Finance (8)
  • Portfolio Management (36)
  • Retirement Healthcare (1)
  • Retirement Planning (66)

WiserAdvisor is America’s oldest and largest independent network of screened financial advisors. We make it easy and convenient for consumers to find and connect with advisors in their area. We have successfully helped over 100,000+ individuals find their best financial advisor since 1998 with no match fees, no commitments, no obligation, and complete confidentiality. WiserAdvisor has been featured in The Washington Post, The Washington Journal, ABC, CBS, Yahoo and has been seen in numerous other leading financial news and information websites.

Follow Us

  • Recent

  • Popular

  • Financial Habits

    5 Healthy Financial Habits You Need to Practice This Year

    By WiserAdvisor Insights
    January 25, 2021
  • Retirement

    Should Your Portfolio Become More Conservative as You Approach Retirement?

    By WiserAdvisor Insights
    January 22, 2021
  • ETFs

    7 Reasons Why ETFs Are Getting Popular Among Investors

    By WiserAdvisor Insights
    January 21, 2021
  • The benefits of working with a financial advisor - WA

    The benefits of working with a Financial Advisor

    By WiserAdvisor Insights
    July 16, 2019
  • retirement-accounts

    Choosing the Best Retirement Accounts

    By WiserAdvisor Insights
    July 8, 2019
  • financial planning DIY-Checklist

    How to Prepare an Annual Financial Plan – Financial Planning DIY Checklist

    By WiserAdvisor Insights
    June 10, 2019

Contact Us

Corporate Headquarters

12150 Monument Drive, Suite 400
Fairfax, VA, 22033

Business Hours

8:30 AM – 5:00 PM EST (Monday – Friday)

Email Address

wa.assistance@wiseradvisor.com

Phone Number

(703) 651-2060

Fax Number

(703) 259-4487

  • Privacy Policy
  • Terms & Conditions
© Copyright 2019 WiserAdvisor.com. All Rights Reserved.

Add WiserAdvisor - Blog to your Homescreen!

Add