If you're looking to expand your investment horizons, the Taiwan Stock Exchange (TWSE) can be an attractive option. The companies traded on the TWSE are primarily firms based in Taiwan. Making the decision to invest in the Taiwan stock market allows investors to tap into the fruits of one of Asia's most dynamic economies.
There are more than 900 publicly traded companies listed on the TWSE. If you're curious about how to invest in the Taiwan stock market for the first time with tools as simple as online trading apps, take a look at the basics.
Decide How Much to Invest
The first step is simply looking at your finances to see how much money you'd like to divert to Taiwanese investments. This also requires doing a risk analysis by conducting a deep dive into the economy of Taiwan. Factors like a low unemployment rate, low inflation, high foreign reserves and a bounty of successful tech companies make Taiwan a strong market to invest in for stability. However, it's also important to know that Taiwan's growth is heavily dependent on the economic temperature in China when you invest in Taiwan stock market stocks.
Choose an Investment Vehicle
For many investors looking to enter the Taiwan stock exchange, exchange-traded funds (ETFs) offer the simplest solution. The benefits of ETFs include built-in diversification, straightforward terms, high liquidity, quick trading and low transaction costs. This is also a good option if you're focused on passive account management.
In fact, the biggest benefit to choosing the ETF option to invest in the Taiwan stock exchange is that ETFs are traded exactly like stocks. This is a very easy option due to the fact that ETFs can be traded on popular online trading apps.
When using ETFs to invest in Taiwan, the primary source of income is your capital gain. There is also dividend income. As an investor in an ETF with dividend income, you're entitled to a share of the dividend income each time stocks within the ETF pay dividends. Lastly, investors who invest in ETFs using foreign currency can also make money via the exchange rate when selling.
Invest in a Taiwan ADR
An American Depositary Receipt (ADR) is a foreign stock that permits investors to trade shares on the U.S. exchange. In fact, ADRs are traded the same way as U.S. stocks. That means that you can often access ADRs using popular online trading apps.
Get Help From a Broker
If you're feeling unsure about how to buy stocks in Taiwan, employ the help of a broker or brokerage firm capable of providing access to stocks listed on the Taiwan Stock Exchange. Your broker will execute your desired trades for you. The goal is to get you the stocks you desire at the best available prices.
How Many Stock Exchanges Are There in Taiwan?
Considered the main stock exchange of Taiwan, the Taiwan Exchange (TWSE) is based in Taipei. However, Taiwan is actually home to three markets in total. The other two are the Taipei Exchange and Taiwan Futures Exchange.
Is the Taiwan Stock Market Open Today?
The Taiwan Stock Exchange is open every Monday through Friday from 9:00 a.m. to 1:30 p.m. It is one of the only markets in Asia that does not close for lunch. The shorter, compact trading day of the TWSE can be an advantage for traders because it helps to boost liquidity while decreasing spreads.
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Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.