Why Invest in International Stocks?
Why should investors invest in international stocks? Many United States investors have successfully used, successfully, the US stock markets to gain the return on investments they are looking for. Yet, now, more than ever, there are some ideal international markets that are appealing in their own right. As someone looking for a way to get a sizable return on your investments, these stock markets may be just the right way to go. International stocks offer several benefits that the US stock market is currently not providing. Here is a closer look.
Does your investment strategy have you buying both large and small cap stocks? If so, the international market is somewhere you should be looking for opportunities. As you will find if you stay active in investing for some time, all markets are cyclical. There is little chance that you will know when these changes will happen, in any market. Yet, if you diversify your portfolio enough, and include a number of different international markets in the mix, you will boost your chances of avoiding turmoil.
For example, most investors realize the importance of diversifying their portfolio to include a number of different asset classes. As the market moves, one asset may fall, but at the same time, another may rise. In turn, these markets are both not going to yield a profit, but they will allow you to ride out the ups and downs without losses that are too heavy. The same is true with geographic classes.
There is no doubt that many American investors have what is called a "home country bias", favoring investing in the country they live in, are loyal to and want to see do well. If you set that aside-though, there are many reasons why you should invest in international stocks.
International stocks offer several key benefits, but perhaps it is hard to see this at first. Here are some figures that may show you just how beneficial these investments can be to your portfolio.
- There is about one half of the world's market capitalization located outside this country's borders. In other terms, there is plenty to be had in the global marketplace.
- Did you know that only about 5 percent of the world's population lives in the US? That means that 95 percent live in other countries. Take a closer look and you will notice that some 71 percent of the world's GDP is produced outside of the US.
- In international stock markets, there are some 49 countries where you can find publicly traded investment securities. There are some 37,000 companies that are listed to be traded globally. On the other hand, in the US, there are a mere 5000 companies from which to select.
Now, take an even closer look and you will notice one of the main reasons you should invest internationally: some of the world's largest, most stable and most likely to explode stocks are located outside our country and are traded there. Companies like these are great investments for just about anyone.
Read More Articles About International and Foreign Investing:
International Investing Using ADRs
Have you thought about international investing using ADR's? ADR's, or American Depository Receipts, are a way for Americans to invest in international stocks. They were first brought onto the scene by J.P. Morgan, as a way to invest overseas inexpensively. They allow Americans to acquire shares of companies around the globe. Just about every type of company is available to be purchased in this way. It helps you to avoid having to buy the stock on foreign exchanges, but to give you all of the ability to trade you want to have.
Understanding Developed International Markets
Understanding developed international markets is key to learning how to invest in them. Developed markets are much like the US, in that they are strong opportunities that offer good return on investments. Emerging markets are those just fresh on the books. Remember, though, that the age of the country and the overall impression you have of that country may not define the investment opportunities there. The US market was considered emerging less than 100 years ago, after all.
Listed Companies of Shenzhen B Shares
B Shares traded on the Shenzhen Stock Exchange are traded in HKD, while B Shares traded on the Shanghai Stock Exchange are traded in USD. The settlement date for traded shares is T+3.
Listed B Shares on the Shanghai Stock Exchange
Shanghai B Shares are traded in USD, while the B Shares on the Shezhen Stock Exchange are traded in HKD. The settlement date for trades on this exchange is T+3.
Current List of Stocks on the Taiwan Stock Exchange
This is the most current list of available B Shares on the Shenzhen Stock Exchange:
The Hong Kong Stock Exchange
The Hong Kong Stock Exchange known as the HKEX; SEHK: 0388 is the stock exchange of Hong Kong. The Hong Kong Stock Exchange is Asia's 2nd biggest stock market, behind the Tokyo Stock Exchange. Hong Kong Exchanges and Clearing is the holding company for the exchange.