Reasons to consider Investing in Foreign Markets

Investor should consider investing in foreign stocks for diversification of portfolio, dividends yields may be higher than those offered by companies listed on United States’ stock exchanges, foreign economy is growing faster than that exist in the United Sates, and more companies are listed on foreign exchanges than the United States.  The ultimate reason to think of investing in foreign stocks, because it translates to higher returns on investment compared to investing in stocks from the United States.

Diversification of the portfolio is always great reason for an investor to think of other investment opportunities. Foreign markets do not always move in the same direction of the United States’ economy.  For example, the United States could have struggling economy why China’s economy is striving.  This usually means stocks prices will be down in the United States while China’s stock prices will be rising; therefore, diversification of an investor’s portfolio with foreign stocks would offset any losses that occurred in stocks from the United States.

The dividend yields of foreign stocks in some cases are yielding more than three percent better than dividend yields offered by stocks from companies located in the United States. There are more investment opportunities for high yielding dividend stocks offerings in foreign markets than the United States.  Investors wanting to make more money via dividend income, it is great reason to why investors should consider investing in foreign stocks.

Foreign economic growth in some cases is happening at a pace greater than the United States such as China’s economy has been growing nearly eight percent since 1978.  A growing economy for the investor means there may be good investment possibilities.  Since most economies are not down at the same time, the diversification into foreign markets will offset losses of accumulated by United States’ stocks, and it will open more companies as prospective investments.  A growing economy translates to higher returns for the investor; therefore, it is an ideal reason for foreign stocks to be considered as a potential investment.

There are more companies listed on foreign stock exchanges compared to United States’ stock exchanges; therefore, by having more choices, it means an investor has a better opportunity to pick a great investment. Foreign stocks exchanges list more than 9000 companies for an investor to make a potential investment.

The possibility of higher returns by investing in foreign stocks is the ultimate reason that investor should ponder thoughts of investment. Since many foreign markets are growing, it means foreign stock prices will grow considerably.  By investing in foreign growth stocks, it may translate to better returns than other investments. For example, if an investor invested in companies listed the Standard and Poor 500 in 2010 he or she would expect nearly a twelve percent return on their investment.  If the investor chose to invest in stocks of the foreign stock exchange such as Germany would have wielded nearly a nineteen percent return.  All investors love higher returns; therefore, it is a great reason to invest in stocks.