Buy International stocks – Go investing in foreign stocks
If you have not heard of the emerging markets or the stocks of the foreign companies in the BRIC economies then you need to understand those fast and then buy International stocks. The reason is very simple. There are economies which are growing much faster than the US economies. The companies there are doing amazing business and have returns which are unheard of in the US stock market.
BRIC countries Brazil, India, China and Russia have now got huge economies and they have good markets with robust stock exchanges doing good business.
Chinese companies have grown huge and they have a large number of ADR’s that are listed in NYSE and NASDAQ. You want to trade in Chinese stocks then this is the best way. The huge middle class population in China is spurring growth. Same holds true for India with the large Indian middle class give huge growth momentum to the stocks as well as there are companies which are doing great with outsourcing and of course IT stocks are simple doing wonderful like Infosys (INFY).
How to buy international stocks or the foreign stocks?
You can buy ADR or the American depository receipts of the foreign stocks like Infosys (INFY). These ADR’s trade based on the underlying share value of the domestically listed stock. Before investing in these stocks please do some fundamental analysis on these stocks
Secondly you can invest in emerging markets mutual funds. These mutual funds track the foreign stocks .
There is a lot of emerging market mutual funds which are out there which have been doing great over the last few years.
These are
Dodge & Cox International Stock (DODFX)
American Century Intl Growth (TWIEX)
Oakmark International (OAKIX)
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Emerging Markets Stock Index Fund
SSgA Emerging Markets (SSEMX)
Thirdly invest in global market ETFs. Then there are international ETF and the country specific ETF which you can trade.
Then lastly you can buy the stocks directly from the big name traders like the E*trade and the Schwab’s of the world. But before you place the order make sure that you know the local prices of the stock if you are trying to buy the stock in that market. Then ask what commission will be charge as generally it is very tough to get lower commissions on these discount stock brokers.
Then there are certain specialized stock brokers who only trade in the foreign stocks and they have the best system in place. You can them and they will give all sorts of advice and also they are much more transparent.
Some good international stocks that are listed here are
H&M (HMRZF)
Embraer(ERJ)
Nintendo(NTDOY)
Dr. Reddy’s Laboratories(RDY)
BAIDU(BDY)
BHP Billiton Limited (BHP)
PetroChina(PTR)
Rio Tinto (RTP)
Statoil (STO)
Nestle (NSRG.Y)
Glaxo SmithKline (GSK)
Sanofi Aventis (SNY)
Turkcell Iletisim Hizmetleri(TKC)
Exeter Resource (XRA)
That said there are risks involved in the investing of the stocks and these two major risks are the currency risk which can happen because of the dollar versus the other currency ration going bad.
Also the other risk is because of the country. Countries like China do not have a democratic form of government and hence the chances of them having unrest and other political issues can cause the economy to go bad and in turn causing the shares to go bad.
So if you want to get rich off the stocks then make sure that you diversify into the international stocks.
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- Best International Funds – Easiest way to invest in international stock market
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- Investing in Stock Market through Mutual funds – Introduction to Mutual Funds
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