How Do I Invest Overseas?

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I want to buy shares in a company that is listed abroad. How do I do it within the U.S. without getting stung with large minimum investments and high fees? -- A.B.

As an investor, there eventually comes a time when you want to spread your wings and expand the investment options that are available to you. Foreign stocks offer a whole world (literally) of investment possibilities, but there are some serious concerns with investing in a company whose stock trades outside the United States. Here's how you can invest overseas without sinking your financial ship along the way.

First, Why Invest in Foreign Stocks?

There's a big financial world outside our borders. Foreign investment opportunities are myriad and filled with potential. Stock markets in other countries often experience faster growth than our own markets do. For example, in China, the Shanghai Stock Exchange's SSE 50 Index has returned more than 190% since January 2004, a period over which the S&P 500 (SPY) has returned 38.6%. Much of this growth overseas can be attributed to the fact that the entire economy is growing at warp speed in many developing nations (commonly referred to as "emerging markets "). Not a bad thing to tap into.

Besides the economywide draw of investing overseas, you may discover individual companies abroad that are also just too attractive of an investment to pass up. So what's an adventurous investor to do?

How to Invest in Foreign Stocks

There are quite a few ways to invest in foreign stocks. Buying these stocks doesn't have to be complicated or expensive. In fact, it can be no more involved than investing in any domestic stock.