If you haven’t considered investing in a foreign company, you might want to think about it and explore your options. Here are a few criteria that you should note when looking into placing an order.
1. Do your research on the company. Does the company make money off sales from the United States? If so, what would the company’s balance sheet look like if those sales ceased?
2. Choose an industry that is globally needed and depression-proof. Industries such as energy, medical, transportation, and edibles are needed for basic survival. Companies in these realms have a better chance to turn a profit in tough times.
3. Choose your exchange carefully. There are different rules to purchasing with each exchange, such as having a stockbroker registered in that exchange. Also note the exchange’s country of origin’s financial situation. An exchange which moves in synch with the American exchanges is probably not the best exchange board for this purpose.
4. Many brokerages are able to buy foreign stocks trading on foreign stock markets directly for you. It will cost more than buying US traded stocks. Find out the terms and conditions from your brokerage house.
5. Read the newspapers/online news portals from your country of choice. The point is to get a taste of the trends and forces that are working in the environment of your investment. By doing this, you can identify small changes in market conditions that may affect your investment and get out before the downturn.
6. Don’t ignore politics. Political unrest, coups, and leadership changes will all effect your investment.
7. Consider global mutual funds which primarily invest in foreign companies. These funds have already done a lot of research footwork to be sure the investment is sound.
8. Explore U.S. companies that do all or most of their business overseas. These may still fluctuate with the U.S. stock market but are a safer bet because their income is derived from economies spread out over a larger area. The more global the company, the safer the wager.
9. Look into foreign bonds to diversify your global portfolio. Each country has their own names and rules for these bonds, but the same principle – slow, steady returns with little risk.
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