Last updated November 11th, 2018.
You might have already traded stocks in your home country before. However, investing in Asia and being part of the growth happening in this region now makes more sense than ever.
The center of international power is shifting eastward. Four billion people, more than half the world’s population, are now living on the Asian continent.
Meanwhile, economic growth rates in places like India and Vietnam far surpass anywhere in the western world.
Simply put, real estate and stock investors alike must start looking all across the world to give themselves the biggest chance for success during the 21st century
International Investing = More Diversification
A main reason why you should start buying global assets is because of diversification benefits. After all, investors must not only make money but protect their assets too.
You can increase a portfolio’s diversification and lower several different types of risk by investing globally.
Instead of relying on just a single country’s growth, you’ll spread your economic and political risk across the world. The same is true for currency risk when you buy stocks denominated in a different currencies than your own.
Everyone knows that putting all your money in a single stock would be risky. Investing in a single country is equally risky though.
You can greatly diversify your holdings while increasing the chances of long-term growth through buying international stocks.
Global Markets, Greater Flexibility
Investors truly thrive when they have flexibility. The ability to trade globally instead of just in your own market is a huge advantage.
Many thousands of publicly traded companies are out there in the world. Some of these stocks are fantastic buys. Yet they’re largely unavailable to anyone who doesn’t have a brokerage account in the country they’re traded in.
Being able to react to global 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 a huge oil field was found off the coast of Hong Kong. By having a Hong Kong brokerage account already in place, you could immediately react and buy assets that would benefit most.
Few Drawbacks for International Investors
Of course, there are difficulties with investing in Asia. Most of them are related to investors being unfamiliar with markets besides their own.
Sometimes stock information is in a different language. The process of 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’re willing to put in the time and effort.
Frontier markets are some of our favorite places to invest in. They multiply many of the advantages that come from international investing.
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