Countless apps make it easier than ever to put a few bucks towards your stock portfolio, but too few know how to make the most of their investments. It’s not too late to learn, no matter whether you fell prey to predatory stock apps or want to take an already-sound strategy to the next level.
Big multinational and domestic stocks are the shiniest picks, but global investments are a smart way to fill out your portfolio. Making the foray shields you from failure and can open paths to success. Read about some top benefits of buying foreign stock here.
1. Store Your Eggs in Multiple Baskets
If you’ve done even the most basic research on investing, you know that diversifying funds is a key safeguard against market ups and downs. A portfolio with a few investments could go very wrong if one or two don’t go your way. Putting money towards a wide range of stocks, bonds, nontraditional investments, and more is the best way to give yourself some cushion.
Risk is the most popular factor to consider when planning your stock strategy. Smart investments range across the risk spectrum. Still, don’t fail to grow your portfolio with international as well as domestic stocks.
2. Hop Onto Global Investments Before They Take Off
Successful investors buy before stocks get popular and shoot skyward. Note up-and-coming domestic businesses, but watch global business trends for a leg up on your peers.
Many investors ignore early signs of success that sprout overseas. Check out this page about the Australian stock market for a case in point. Unless you do business Down Under, chances are slim that you know much about it.
Dipping your toes into the Aussie market and other less-common countries’ businesses keeps you ahead of global trends. Imagine how much you could’ve made by investing in UGG boots before they left Australia or in Angry Birds before the Finnish game ballooned into a worldwide franchise!
3. Take Advantage of Exchange Rates
Traveling in countries with less valuable money and trading currencies are two main ways to take advantage of exchange rates. While buying foreign stock isn’t as direct, you can get cheaper stocks where exchange rates are in your favor.
Successful foreign stocks often cost less than domestic stocks when their home countries’ currencies are less valuable. If a foreign currency’s value drops compared to yours, your shares could grow even if the companies’ values halt or fall. When the ratio shifts in favor of the foreign currency, less valuable stock rises, which could make up for some of your losses.
If it’s not clear by now, exchange rates affect all global trade. You need to pay attention to currencies’ worths when buying and selling international stock. Those who don’t want to mess with that factor should invest in currency-hedged funds.
Learn to Organize a Fulfilling Life
If you haven’t invested in the international market yet, this article makes clear why you need global investments in your stock portfolio.
After updating your financial strategy, diversify your portfolio of life skills. Reading some of our other quick, fun articles on important subjects gives you a push in the right direction as you work towards a fulfilling life. Click on another one to discover the must-know adulting tips and life hacks you’ve been missing.