Tips For Out Of International Investing
If you’re beginning your foray into investing, then there’s a pretty good chance you’re looking to break free from just the volatile global market and step back into the local investment options – or vice versa. Of course, starting local is always a good idea and often presents the lowest fees, regardless of investment type – property, stock, currency, etc.
However, if you’re looking to branch out into the larger and faster moving investment markets, international investment is certainly still the way to go. There are far more opportunities on a global scale, and depending on the current state of your domestic economy, international investment might be a way to earn an income when your national economy is falling.
With that in mind, getting into investing outside of the international markets and bringing things back home can be a little daunting, and so we have some tips for you below to make the process a little more simple.
Keep in mind that you should only ever invest funds that you can afford to lose and never place large sums of money into a single stock option, or any investment, given that you could lose a large majority of your wealth.
And with all of that said, let’s take a look at a few simple tips for investing!
For Property, Remember to Keep Location in Mind
For our readers looking to branch out into the property investment world, then our biggest tip is to go all-out on your research into a property’s location and potential growth in its value. When we invest in property locally, we often have far more knowledge in mind, both from living in the country and potentially living within driving distance of the home.
When we spread our investment wings and fly abroad, there is a lot more research needed to determine whether a property is a winner or not – so keeping things local is a little less work, and that’s a good thing.
For example, you will always want to take a look at whether a property is in a good area that is safe, ripe for development and boasts neighbouring homes that are going to flourish. This might require you to reach out to people in these areas and speak to them personally about the area and whether this is the right place to invest or not.
Added to this, you will always want to make sure that you’re following some sort of property investment strategy and have a loan in mind that will ensure you’re looking at investment growth and not losing out too much on fees. You can learn more by taking a look at banking and investment platforms for some added direction.
Consider the Online Brokers
One other consideration we ask you to keep in mind are the brokers.
Although there are typically a tonne of global brokers to choose from who will operate within the markets of your choosing, you will generally want to stick with a domestic broker who also offers international investment services. This way you have a local and direct contact onshore for support and questions, and can also invest in things such as stock and crypto in your local currency without having to worry too much about conversions.
Added to this, with local expertise you’re going to be more in tune with tips and support offered in your local language and following local regulations. This reduces confusion and leaves you with less room for error when it comes to investing overseas and locally too.
Diversify from the Outset
To reduce your chances of seeing losses and to easily break your investments into as many small chunks as possible, we suggest that you diversify where you can. Though this might seem like a lot of work, and quite costly (to invest in a number of different stocks from the outset) it can typically be done by investing in a mutual fund or an ETF.
These types of funds give you a large reach with a number of different stocks and this means when the market begins to wiggle, your investments are going to be rather stable and not at risk of falling all too far in value.
The same goes with investment in property. There are a myriad of services and platforms out there that allow you to invest in property markets as a whole rather than purchasing an entire home for example.
Choose Investment Markets Which Are Easy to Monitor
A rather overlooked tip is one that we suggest for the newbie international investors out there, and this is to look in markets that you find easiest to watch.
Whether from a timezone standpoint or a brokerage standpoint, it is always going to be in your best interests to choose a market or a platform that makes keeping an eye on your investments as easy and stress free as possible. A lot of investors see a typical market wobble or misinterpret a data point and jump the gun on selling all of their stock in a flash and experience a large loss because of this.
With that in mind we suggest that you do all you can to choose stocks, brokers, markets and any other investment options that are easy for you to understand and follow.
Risks to Keep In Mind
To end our list of tips, we will briefly touch on a few common risks to keep in mind. Being mindful and understanding the following risks will reduce your chances of making some common mistakes or losing your investment gains:
Political Instability
One commonly ignored point when it comes to investments locally and globally are politics. Depending on the government in power and the choices they’re prone to making, you could see some major dips in your investments.
Reporting Requirements
Another point to make a note of is that you’re going to be required to report your earnings and incomes depending on where you’re investing and what types of investments you’re choosing. Forgoing to report essential income data can see you fined, and thus see you losing a lot of your investment income.
The Takeaway
With all of the points above in mind, it’s clear to see that both domestic and international investment options have their perks and downsides, however, it’s good to know that keeping things local and moving investment out of the international markets and into your local country can still garner some pretty great returns if you do your research and make educated decisions.
