How to Buy Shares in an Overseas Stock Market
The United States accounts for only 50 percent of the world's capitalization when it comes to investing. For this reason, many investors will have part of their portfolios in overseas stocks to take advantage of opportunities that exist there. Many investment advisers recommend to their clients to have some exposure to overseas markets in order to have a properly diverse portfolio.
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Instructions
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Open a brokerage account with a traditional broker or with one of the many online brokers that are available.
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Calculate how much of the total portfolio will be allocated to overseas stocks. Many investment advisers recommend upwards of 35 percent of an entire portfolio allocated to overseas markets.
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Select a method for investing in overseas markets. An investor can invest directly with an overseas broker or he may choose to invest in overseas markets with a mutual fund created with overseas stocks. The mutual fund approach can be done through a broker or online without a broker's help if the investor has an online account. If the investor wishes to invest directly with an overseas broker, he needs to contact an overseas broker through his own broker, whether that broker is a traditional broker or an online broker.
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Determine the type of overseas mutual fund to invest in if that method is chosen. An overseas fund can include companies from entire region or just a single country. A fund of an entire region may be less risky than a fund from a single country. Which one is chosen depends on the risk tolerance of the investor.
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Research any prospective investment thoroughly before investing. Most overseas investments can be researched through the broker or through online sources. The individual investor must read the prospectus of any fund before investing and do as much of his own research as possible.
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