When deciding on where you place your money, you’d be forgiven to sticking with the companies and markets that you know. But staying close to home may mean that you miss out on growth opportunities and the chance to hold a more balanced portfolio. Read on for our tips on holding foreign stocks.
We’re lucky in the UK – lots of the world’s biggest companies have their headquarters here or are listed on the FTSE 100 in London. If you really want to broaden the scope of your investing, however, it’ll be important for you to look further away in order to capture the best value opportunities.
There are two key reasons why you would want to widen your potential investment pool to foreign stocks: diversification and growth.
Foreign stocks can be purchased through ETFs or mutual funds that specialise in making investments overseas. Investing through this mechanism will mean that you essentially hand your money over to someone who will pick and choose specific stocks abroad that they will invest into on your behalf. This is a great option if you don’t feel like you know enough about the specifics of a different country, but would like to get some financial exposure to it.
If you feel more knowledgeable about where you want to place your cash, you can also purchase the individual stocks of foreign companies that trade in the UK ??. Depending on your broker, you can also invest in companies listed on foreign stock markets, although you may have to fill in tax related forms or waivers.
With Wombat you can buy fractional shares of stocks of some foreign companies. We’ve created themes that include some of the biggest and best companies in the world, making it quick and easy for you to invest in them. You can take a look at the different themes we’re offering, or even pick out your favourite foreign stocks yourself.