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Reid K.
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I'm a Los Angeles native currently living in Southeast Asia. I've invested in stocks and private equity since a very young age and am familiar trading on the U.S., Singaporean and Thai exchanges. I love nothing more than being on the ground in emerging markets and seeing the amazing... More
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InvestAsian
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InvestAsian
  • Why Invest Globally? 0 comments
    Aug 5, 2014 6:23 PM

    You may have traded stocks in your own market before and be familiar with the processes involved. However, deciding to begin investing in the Asian market makes sense in many different ways. From diversifying your portfolio, to discovering hugely profitable buys that cannot be found domestically, those in the 21st century will need to start investing in foreign stocks to give themselves the biggest chance for success.

    Diversification

    One of the main benefits in deciding to invest abroad is the added diversification. Investors must not only make money, but protect it as well. By buying stocks in foreign countries, you increase your diversification and lower several different types of risk. Any local political and economic risk that your own country possesses will instead be spread out throughout the world. The same is true for currency risk when you buy stocks in a different currency than your own.

    Just as investing in a single stock would be risky, investing in a single country is also risky. By buying stocks globally, you also diversify your holdings and increase the chances of long-term growth.

    Flexibility

    Investors truly thrive when they are given flexibility, and being able to trade internationally instead of being restricted to your own market gives you a huge advantage. There are tens of thousands of publicly traded companies in the world. Some of these company's stocks are fantastic buys, but are unavailable to those who do not have a brokerage account set up in the country they are traded in.

    Singapore

    Singapore is stable and has stocks from several different countries such as China, Thailand and Australia listed on its exchange.

    Being able to react to international news also gives flexibility. Local events can be hugely profitable for investors, but only if they have access to the local exchange. In a hypothetical scenario, let's imagine that a large oil field was found off the coast of the Philippines. By having a Filipino brokerage account already in place, you would be able to immediately react by buying assets that would benefit the most.

    Drawbacks

    Of course, there are difficulties in investing abroad. Most of them are related to the unfamiliarity that most investors have about markets besides their own. Much of the time, stock information is in a different language, and the process for setting up foreign brokerage and bank accounts can deter investors entirely. But while there is a steep learning curve to global investing, the positives far outweigh the negatives if you are willing to put in the time and effort.

    See more at www.investasian.com

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