Investing internationally doesn’t have to be challenging or scary. It can also be quite lucrative, especially for those willing to take a risk and venture beyond their country’s borders. In fact, investing beyond your borders can help you grow your wealth as well as diversify your portfolio. With that being said, investing internationally comes with its own unique set of risks and rewards. In this article, Paul Zogala, Trader at Murchinson, will highlight some of the key benefits of investing globally and provide you with a few reasons why it makes sense for you to begin doing so right away.
Investing Globally Is Worth It
Investing internationally can be a very lucrative venture for investors. As interest rates remain low in the US, investors are looking to diverse sources of income. This has led to increased demand for international assets. It’s also worth noting that investing in international assets can provide diversification benefits. This is because the price movement of one asset class is virtually independent of the price movement of another. Investing in international stocks can provide inflation protection and provide a hedge against future price increases – both of which are becoming increasingly important in today’s uncertain economic environment.
Diversification
Diversification is an important principle that investors should always keep in mind. By diversifying your assets across different sectors and countries, you can significantly improve the risk-adjusted returns that you get from your investments. As Paul Zogala explains, investing in international stocks can provide a high level of diversification because the price movements of one asset class are virtually independent of the price movement of another. Although investing in a single country’s stocks may seem risky because of the possibility of experiencing uneven price movement, diversification can help mitigate this risk.
There’s always demand for safe assets
The world’s investors are always looking for ways to diversify their assets and increase their returns. Investing in foreign stocks can provide a high level of diversification because the price movements of one asset class are virtually independent of the price movement of another. It’s also worth noting that investing in foreign stocks can provide a significant amount of growth because demand for assets like stocks in developing countries is always high. Investors interested in growing their wealth and diversifying their assets can choose to invest in foreign stocks.
Trade-able securities provide inflation protection
Another important benefit of investing internationally is the ability to protect your assets from inflation. Stocks and bonds fluctuate in their value due to factors like interest rates and general market growth. However, there are certain types of investments with a fixed coupon rate that tend to stay relatively constant even if the price rises. According to Canadian adviser Paul Zogala, assets that provide a fixed coupon rate like investment-grade bonds and high-quality corporate stocks are considered to be inflation-protected. Investing in bonds that provide a fixed coupon rate can provide significant protection from inflation because their price generally does not fluctuate as much as other assets. This means that, even if inflation increases over time, the price of these bond will not increase as much.
Risk Mitigation
Investing internationally can help you diversify your portfolio and protect against future price increases. One of the main benefits of investing in foreign stocks is that their price movements tend to be independent of the price movement of other asset classes. This can help investors diversify their portfolios and protect themselves against future price increases.
Conclusion
Investing internationally can provide significant benefits to investors. It can help you diversify your portfolio and protect against future price increases by investing in foreign stocks. It can also provide a high level of diversification because the price movements of one asset class are virtually independent of the price movement of another. Investing internationally can be a very lucrative venture for investors.