How Do I Invest Overseas?

These are the two more complex choices for foreign investing. If you want to buy foreign stocks with your current broker, good luck. Few brokers currently offer their clients the ability to invest directly in foreign stocks. If this is the case with your broker, it's advisable to ask them whether they can suggest an affiliated foreign broker to open an account with.

Opening a foreign brokerage account can be a hassle in many places and impossible in others, especially in emerging markets that regulate outside investment. Refer to your prospective broker if you have any questions or concerns about the legal and tax implications of opening your foreign account. (For a refresher course on how to open a brokerage account, click here.)

International Concerns

It's important to remember that not all investments abroad are as safe as investments here at home. Where a company is located can have an even greater impact on your investment than how they make money. This is especially true of companies who trade in developing nations. Highly volatile economies, low trading volume , and poor regulation can all contribute to the financial implosion of an otherwise enticing investment.

Because accounting standards can be anything but standard in other countries, financial reporting is very susceptible to inaccuracies in some places. It's pretty disconcerting to have to wonder whether that annual report you're reading contains more fiction than a Dan Brown novel. For those not versed in the intricacies of breaking down financial reports, limiting your investment to industrialized nations will definitely marginalize that risk . (To get started with financial statements, click here.)