Should I Invest In International Stocks.International equities refer to stocks or shares in companies that are based outside of an investor’s home country. They represent a way for investors to diversify their investment portfolio and gain exposure to different markets and economies around the world.
Should I Invest In International Stocks.
- Diversification: Investing in international equities can help spread investment risk across different countries, industries, and companies, reducing the impact of any one market downturn on a portfolio.
- Opportunity for Growth: International equities can offer exposure to rapidly growing markets and emerging economies that may have higher potential for growth than more mature markets.
- Currency Diversification: Investing in international equities can also provide currency diversification, which can help to protect against the risk of currency fluctuations.
However, investing in international equities also comes with risks such as political instability, economic downturns, currency fluctuations, and regulatory changes. It’s important for investors to conduct thorough research and consult with a financial advisor before making any investment decisions.
What advantages does investing in international stocks offer?
One of the main benefits that investing in foreign stocks offers is the chance to seize opportunities and protect capital , promoting a good diversification of investments.
Another important point that favors investing in foreign stocks, compared to buying currencies from other countries, is the valuation limit found in this last option.
The dollar exchange rate, for example, varies in relation to the Real, but remains at a certain level. Shares, on the other hand, no longer have this limitation: if the company has achieved an excellent result, the investor receives the equivalent of a stake in the assets, even if the appreciation has been very high.
What is needed to invest in international stocks?
While this is a very interesting alternative, it is not always affordable. Investing in assets from other countries requires a series of care necessary for the transactions to be carried out.
We highlight here the main steps for this.
Open an account abroad
This part can be quite laborious and bureaucratic; however, to receive dividends, it is essential to open an account abroad, with which you will be able to work with foreign currency.
It is worth remembering that this step involves maintenance costs, in addition to assuming constant monitoring of the new account.
Do a good stock analysis
The analysis of national assets is already quite laborious, as it is necessary to relate them to the Brazilian economic scenario, carefully evaluating the indices and the entire history of the company.
When it comes to an international action, this degree of difficulty increases – since, in addition to mastering the language, it is necessary to have a solid knowledge of the economy and politics of the other country, in addition to the companies that offer the quotas.
If, for the valuation of assets of national companies, the participation of an expert helps a lot, the support is even greater when it comes to foreign shares – of course, as long as he is a really competent professional capable of working well with these assets.
Open an account at a foreign brokerage
In the same way that, in Brazil, you need to have an account at a brokerage to make the transactions viable, it is also necessary to have this intermediary to buy and sell shares abroad.
It is worth mentioning that the shares are not in the buyer’s name. In the United States, for example, the assets remain in the name of the broker, which gives the buyer the right to access these securities.
Transfer money to another country
As the transactions are made in currency, you must send money to the country in which you will buy shares.
For this, it is necessary to hire the services of a foreign exchange broker or a bank authorized by the Central Bank.
Thus, it is clear that this conversion includes fees such as the IOF and those charged by the institutions involved.
