answersLogoWhite

0


Best Answer

If you mean markets outside the US, there can be several advantages. In many places like China and India, the industrial base is expanding very rapidly which means there is high growth potential. Small companies with the right produce/service can become big companies in a short period of time and if you are in "on the ground floor", your investment will grow with them. Profit potential is higher because of fewer regulations and a lower wage base. On the flip side, when you get into "emerging market" countries (3rd world) there can be huge risks. Things like unstable governments, civil wars, etc. can reduce your investment to zero overnight. For example, I would not want to be invested in the Somalia tourism industry at the moment. One thing that influences any foreign investment is the fluctuation in currency values (and they fluctuate from day to day). Currency values influence exports and, as seen recently in the Japanese markets, a very small increase in the value of the Yen caused their markets to fall because it made their products more expensive on the world market. At the current time (April 2007) I've heard investment experts say that it would be good to have about 40% of your money invested in foreign markets. The key is, which ones? My second-best advice is to do your homework, and diversify your investments to reduce risk. There are international mutual funds that help reduce risk and diversify your portfolio, and most brokerage firms offer them. In many cases, you can't buy individual stocks from foreign markets without extra fees, so the mutual fund is the best way to go. Some foreign stocks are available in the form of an ADR. My best advice is to contact a broker.

User Avatar

Wiki User

17y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What are the advantages and disadvantages of investing in the overseas stock market?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

What are the advantages and disadvantagesof a market economy?

advantages and disadvantages of market economy


Advantages and disadvantages of retail market?

The disadvantages of Retail Marketing


Advantages and disadvantages of market segmentation?

what is the advanteges and dis advanteges of market segmentation?


What are the advantages and disadvantages of common market?

A common market, or single market, have advantages including consumers have more choice and lower prices. Disadvantages of the common market include that monopolies may be formed.


Explain the advantages and disadvantages of stock exchange listing?

disadvantages of stock market listing


Why should you invest overseas during a recession?

I'll get it started, investing overseas can be considered diversification of your portfolio. An account investing overseas is not as susceptible to US market fluctuations and gives you a chance to have stock in companies in other markets. While this is all true, it turns out as we've seen in the recent financial crisis that the US market can have much effect on other markets.


What are the advantages and disadvantages of Black market?

The Advantages of the Black Market is the Good Prices and it May be a Place Where you can Obtain Rare Items. The Disadvantages are, Well, are Bad Products and Getting Caught.


What are the advantages and disadvantages of mark to market?

Advantages: Eurodollar market has lower interest rates because of less regulation, also financing is cheaper for borrowers, as the market goes by interbank rates Disadvantages: No lender of last...


Advantages and disadvantages of having regulation of financial market in India?

..!..


Advantages and disadvantages of shopping in a street market?

helpp meee


What are the advantages and disadvantages of market economy?

really don't understand


What are the advantages and disadvantages of standardized advertisement in global market?

haha nice