What are the advantages of international investment?

2 Lower risk

Another advantage of international investment is that it can help you lower your overall risk by spreading your money across different countries and regions. This way, you can reduce the impact of any negative events or shocks that may affect one market, such as recessions, wars, natural disasters, or political crises. You can also hedge against inflation, deflation, or currency devaluation by holding assets in different currencies. By diversifying your portfolio, you can smooth out your returns and protect your wealth.

3 Higher growth potential

A third advantage of international investment is that it can offer you higher growth potential by exposing you to emerging markets that have faster economic development, larger populations, and more room for expansion. These markets may have higher returns than developed markets, especially in the long term, as they catch up with the global standards of living, productivity, and technology. You can also benefit from the growth of sectors that may not be well represented in your domestic market, such as e-commerce, renewable energy, or biotechnology.

4 Tax advantages

A fourth advantage of international investment is that it can provide you with some tax advantages, depending on the country and the type of investment. For example, some countries may have lower tax rates, tax treaties, or tax incentives for foreign investors. Some types of investments, such as dividends, interest, or capital gains, may also be taxed differently in different jurisdictions. By investing internationally, you can optimize your tax situation and increase your net returns.

5 How to invest internationally

There are various ways to invest internationally, depending on your goals, preferences, and risk tolerance. You can invest directly in individual stocks, bonds, or real estate in foreign countries, or you can invest indirectly through mutual funds, exchange-traded funds (ETFs), or global depositary receipts (GDRs) that track the performance of a basket of international securities. You can also invest through international brokers, platforms, or advisors that can help you access foreign markets and provide you with guidance and support.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?