How Do I Invest in Foreign Markets?
Investors look to overseas markets to diversify their portfolio. Investing in foreign companies with strong growth sometimes can offset weak performance by their American counterparts. International investments also are coveted as a means to profit from variations related to overseas exchange and interest rates. Smaller investors typically consider buying mutual funds to gain entry into foreign markets. Categorize foreign investments according to risk, prior to making investment decisions. Review your financial statements to calculate the amount of money that may be allocated towards foreign markets. In general, foreign markets are riskier than American investments. Novice investors should limit foreign investment exposure to less than 15% of their overall portfolio. Differentiate between asset classes. Foreign government bonds offer the lowest amount of risk. In terms of stocks, multinational corporations provide the most stability. Identify mutual funds by asset class concentration.
