Why should you invest in international stocks?

Investors should consider such investments as an inexpensive way to hedge portfolios against a potential U.S. stock-market pullback . In particular, Japan, Europe and select emerging markets, such as Brazil, India, Vietnam and Mexico, offer attractive opportunities.

Why is international investment important?

Foreign investment can help boost economic development by providing the necessary capital and resources to finance new projects, expand existing ones, and modernize infrastructure . This can lead to increased productivity, job creation, and overall economic growth.

What are the benefits of investing abroad?

By investing in different jurisdictions, you can spread your risk and reduce the impact of any localized economic or political instability . This allows you to take advantage of global investment opportunities and increase the potential for higher returns.

What is an advantage to investing in foreign markets?

Because of U.S. government restrictions and regulations, international investing offers various advantages that domestic stocks cannot provide. It can also help investors build diversified portfolios and prevent economic risks from compromising long-term growth and profit .

Is it worth buying international shares?

Having a healthy dose of international equity in a portfolio can increase potential for better overall fund performance, and reduce concentration risk with a more even distribution of assets across sectors and regions.

Is now a good time to invest internationally?

2024 may be a good time to look for bargains in international stocks that have the long-term potential to deliver higher returns than US stocks . Fidelity's Asset Allocation Research Team (AART) forecasts that international stocks will outperform US stocks over the next 20 years.

Where to invest internationally?

American Depository Receipts (ADRs) American depository receipts (ADRs) are a convenient way to buy foreign stocks. ... Global Depository Receipts (GDRs) ... Foreign Direct Investing. ... Global Mutual Funds. ... Exchange-Traded Funds (ETFs) ... Multinational Corporations (MNCs)

What is international investment in simple words?

International investing means holding securities issued by companies or governments outside an investor's home country . Through global investment, portfolios are more diversified and may enhance returns and reduce portfolio risk.

What are the advantages and disadvantages of investing overseas?

Advantages for the company investing in a foreign market include access to the market, access to resources, and reduction in the cost of production . Disadvantages for the company include an unstable and unpredictable foreign economy, unstable political systems, and underdeveloped legal systems.

What are the disadvantages of international investments?

Investing internationally provides diversification and potential for growth, especially in emerging markets, but it comes with a set of risks. Among them, the main ones are the higher costs, the changes and fluctuations in currency exchange rates, and the different levels of liquidity in markets outside the U.S.

What are the benefits of investing in third world countries?

By investing in these countries, companies can reap the benefits of economic growth and development while promoting sustainability for all . These investments provide access to new markets, resources, technologies and capabilities that drive economic growth, create jobs and build local infrastructure.

What are the benefits of a multinational investing in a country?

Economic growth FDI boosts the manufacturing and services sector which results in the creation of jobs and helps to reduce unemployment rates in the country . Increased employment translates to higher incomes and equips the population with more buying powers, boosting the overall economy of a country.

Why invest internationally?

^*Source: Donald G. Bennyhoff and Francis M. Kinniry Jr., 2016.Vanguard Advisor's Alpha^®. Valley Forge, Pa.: The Vanguard Group.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.

Investments in stocks and bonds issued by non-U.S. companies are subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions; and currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. These risks are especially high in emerging markets.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See theVanguard Brokerage Services commission and fee schedulesfor full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

Investments in stocks and bonds issued bynon-U.S.companies are subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions; and currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. These risks are especially high in emerging markets.

For more information about Vanguard mutual funds and ETFs, visitVanguard mutual fund prospectusesorVanguard ETF prospectusesto obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Why invest internationally? | Vanguard (2024)

FAQs

Why should you invest in international stocks? ›

What are the benefits of investing in third world countries? ›