The global economy has made the world smaller. And thanks to the internet, anyone can take advantage of booming markets no matter where they are located geographically. Most online brokerages allow you to buy shares listed in countries like China, India, Brazil, and anywhere else in the world. Financial advisors term buying stocks outside of your home country "diversification." This article will tell you how to diversify by buying shares anywhere in the world online.
Create an online brokerage account. Larger firms like Fidelity and Charles Schwab are more likely to have options for buying international stocks and funds.
Choose what stocks or funds you want to buy. Research the countries, sectors, and companies you are interested in. Remember that some emerging markets do not have the same kind of regulation and accounting standards that U.S. markets have. This makes investing in them riskier.
As an example, let's buy some stock in a solar power company located in China, Suntech Power. This will be especially simple because Suntech Power trades on the NYSE (New York Stock Exchange). This also means it has to meet NYSE standards, which makes it less risky.
Log in to your online brokerage account and choose "Trade." Enter the ticker symbol for Suntech Power (STP) and enter the amount of shares you want to buy. You can check the share price on your brokerage page or a financial site like Google Finance.
Click "Submit" or "Trade" to execute the trade as a market order. Remember that this must be done while the NYSE is open and normal trade is taking place. You should receive confirmation from your broker. Congratulations! You now own part of a Chinese solar power company.
The most important tip in investing is to never invest more than you can afford to lose.
- The most important tip in investing is to never invest more than you can afford to lose.