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Brett Dvoretz

July 6, 2015

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Transferring Money for International Investments and Portfolio Diversification

Have you been considering making a sizable investment in a foreign country? Have you made a profitable investment overseas and looking to take some of the proceeds back to your home country? If so, we can offer a few tips to help you make the most out of your investment. On top of making the most from your money, we can also help you get it back home without losing a bunch of it to a bank or poor exchange fees during the transfer. Take advantage of one of the offers from our preferred money transfer providers like US Forex and World First and get the value you deserve from your profitable foreign investment.

 

Fund Share Portfolios

A fund share portfolio is basically a lower risk way to invest in the stock market, whether foreign or domestic. As any savvy investor will tell you, you never want all your eggs in one basket. Instead, it is important to diversify thereby lowering the risk by spreading your investments over a number of sources. This way, if one company tanks, you never lose too much as others could be experiencing a bull run offsetting any potential loss.

In the past, it was almost a rule that one would invest using fund managers. Lone investing was seen as too risky and almost a fool’s choice. With the addition of online trading platforms and market tracking products, more and more people are taking control of their financial fate and with stellar results to boot. Learning some basic investing strategies and using effective market trackers, it has become easier than ever to profit off the financial markets without having to pay out large commissions to fund managers.

If you are considering diversifying into overseas markets and creating your own financial portfolio, it’s always good to play the long game so you decrease your risk. Stocks often go up and down in the short run, but most good investments will go as long as you have the staying power to play the waiting game.

 

Bond Investing

Government bind investing is one of the oldest forms of investment. In fact, the first government bond was issued in the Netherlands in 1517. The US first started offering government bonds in 1935. A bind is a type of fixed-income security. When purchasing a bond, you are essentially lending money to the US government or a business in return for a small, but consistent interest rate. In essence, you have become a mini bank. Savings bonds come in a variety of values and timelines, but the basic concept stays the same. You receive interest on your bond for a set amount of years at which point, the bond matures and you are paid back your original amount plus the accrued interest. Some bonds even provide periodic cash flow payments.

Despite the low return, bonds are an attractive investment due to their low risk. It is very rare to lose money on a domestic bond investment unless the inflation rate outpaces the interest rate your bond offers. Foreign bonds, on the other hand, involve a bit more risk, but generally offer a higher interest rate and slightly more chance for profit. Some ways to lose money on foreign bond investments include exchange rate fluctuation, naturalization, and taxation. All in all, though bonds are one of the safest investments you can make.

 

Foreign Investments

If you have your domestic portfolio fully diversified, then it’s time to consider further diversification techniques and start looking for opportunities in foreign markets. There are a number of reasons it can be a good idea to invest in foreign markets including tax incentives, protection of assets, and higher confidentiality due to the existence of secrecy legislation. Having investments in foreign countries is the true embodiment of portfolio diversification. Once invested in multiple countries, your financial well-being is no longer tied to the performance of one economy. You can still making money even if the US economy is slumping because your investments in Chine or Europe are growing.

When looking to start diversifying into foreign investments, be sure to check with your accountant regarding tax and legal ramifications that must be taken into account. Offshore investing is perfectly legal, but you must make sure you follow all tax laws relating to taking profits or losses of foreign assets.

 

Transferring Money for Foreign Investments

No matter what type of foreign investment you choose, it will require the transfer and exchange of funds from one currency and location to another. This is where our preferred providers at US Forex can help. Their experienced currency specialists can help you find the lowest cost option for sending your money overseas for investment purposes or repatriating the profits. Set up an account and speak with one of their knowledgeable professionals today.

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