Exploring International Investment Opportunities

International investment opportunities can provide a solid way for investors to diversify their portfolios. There are several different types of investments in this category that an investor could choose. Here are a few of the options that are available to investors.

Stocks

One of the most direct ways for you to get involved in international investments is to purchase foreign stock. Foreign companies sell stock in exactly the same way as domestic ones. You will need to open a brokerage account in order to gain access to these companies. In most cases, you will need to open a brokerage that offers international stocks as an investment option. Stocks provide you with a good way to take advantage of businesses that are poised for growth. In some developing countries, businesses will go through astounding periods of growth and stock owners in those companies are going to be able to benefit substantially as a result.

Bonds

Another type of investment that you could get involved with is a bond. Both foreign corporations and foreign governments offer bonds to investors. When you purchased a foreign bond, you are essentially loaning money to a foreign corporation or government. The bond issuer is going to make regular interest payments to you and you will eventually get your initial investment back as well. This type of investment is a little bit safer than investing in stock, but it does not have as much potential for growth either. In order to get involved with foreign bonds, you are most likely going to have to open an account with a bond broker. In many cases, bond brokers require you to make an initial deposit of at least $5000.

ADR

Another investment option that you might want to consider is an ADR. The term ADR stands for American depository receipt. This is an arrangement in which a domestic investment bank purchases a certain amount of stock in a foreign corporation. The bank then packages the stock as a portfolio and sells shares of the portfolio to investors on the domestic stock markets. With this type of investment, you are going to be able to keep your same brokerage account and invest directly into the domestic stock market. At the same time, you will be able to take advantage of the growth of a foreign company. This type of investment is preferred because it allows you to avoid opening another account and worrying about converting your money into foreign currency before making a purchase.

Mutual Funds

Another good way to get involved in foreign investment is to purchase shares of a mutual fund. There are several mutual funds that specialize in international investment. These mutual funds will empower a fund manager to take the money of the investors in use it to purchase securities from foreign countries. They might buy a combination of stocks and bonds or specialize in one or the other. 

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