If you’re thinking about making your trading portfolio more global in outlook, you’re in luck. From speculating on the value changes between two international currencies to finding potentially lucrative stocks and shares on foreign shores, there are many ways to do it.
Here are some more details on the ways in which your trading can be made to be a little more international in nature.
Perhaps the most obvious place for someone who is looking to go global with their trading activity is the foreign exchange market. The clue is, of course, in the name: trading currencies in a speculative way always occurs in pairs, so even if you trade your domestic currency, you’ll need a foreign currency to pair it off against. This is an ideal move for those who are drawn to the international market because of an interest in international current affairs, as the forex markets often move as a result of what’s happening in the news.
Investing in foreign stocks
One of the key reasons why traders choose to invest in foreign stocks, though, is to lower their risk. If all your stocks are concentrated in one country and that country’s stock market takes a long-term nosedive, for example, your highly concentrated exposure could spell losses for you. Looking abroad, then, is a good move.
Some of the best stockbrokers in Australia can help facilitate your new international ambitions, although in some cases, finding a specialist international broker in the country in which you plan to invest can also make sense. Remember that in some countries you may need a special permit in order to invest abroad: in China, for example, firms in some sectors have limits on the amount of foreign investment they can accept, so it’s worth finding out more before getting stuck in.
But you don’t have to buy actual foreign currencies, stocks or shares at all in order to access an international market. With contracts for difference, or CFDs, it’s possible to invest in derivative versions of assets that track the actual asset – but because ownership of the asset itself isn’t transferred, the barriers to entry are a lot lower. CFD versions of everything from indices such as the NASDAQ to major global corporations such as Amazon and Google can be traded as CFDs. It’s also possible to make higher profits (although, it should be noted, larger losses as well) through CFDs, as they offer leverage opportunities to boost a trader’s exposure to a market.
If you’re looking to expand your stock portfolio beyond the borders of your own country, then, you have plenty of choice. Those who want to try their luck in the currency world will need to go international in order to even enter the market, while those who want to break into the global stock market without the shackles of bureaucracy can consider CFDs. Whatever you choose, remember to get appropriate advice first – and then keep it in mind as your trading career progresses.