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tomlongrpv (71.13)

How to Gain Exposure to Unusual Markets

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May 18, 2013 – Comments (6) | RELATED TICKERS: MTNOY , ERJ

As a relatively new investor I have little experience in buying stock outside of typical American companies and some European companies.  This leaves me not knowing how to expose myself to markets such as Asia (particularly Korea, China and Japan), Latin America and Africa.  As has been the case in the past my interest is in finding individual companies on my own, not investing in mutual funds.  I have managed one African investment and am pondering some Latin American ones.  Asia seems to be a large area of opportunity but I am not seeing easy ways to buy into companies I have interest in.  I could not identify a good Japanese construction company tradinhg through ADRs after the tsunami.  I am interested in learning what others are doing in trying to get a good breadth of exposure to more unusual markets.

tomlongrpv

6 Comments – Post Your Own

#1) On May 18, 2013 at 4:59 PM, HarryCarysGhost (99.69) wrote:

Hey Tom,

I am interested in learning what others are doing in trying to get a good breadth of exposure to more unusual markets.

Best way I've found is investing in large cap American companies. They are always increasing global exposure. (disclosure I own V,GE,KO)

Just remember that foriegn stocks do not play by the same rules, and they can easily give you faulty information.

(I'm speaking from experience by owning a few Chinese stocks. Results were not good)

Cheers.

 

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#2) On May 19, 2013 at 9:03 AM, ChrisGraley (29.75) wrote:

Some brokers are able to buy stocks on foriegn exchanges for you, but even if they can, they might not be able to find a market maker for the one you want. ETF's are another route, but I'm not a huge fan. 

Interactive Brokers will let you trade freely on foriegn exchanges I believe.

Aside from HCG's warning above also take note of a few more risks...

Currency Exchange rate risks. If you are trading on their exchange you'll have to exchange currency both when you buy and when you sell.

The sovereign credit risk. Not all countries are rated AAA and a downgrade can effect their entire market.

Political Risk. You may buy stock in a company only to find a leader like Chavez has taken it over for the state. They could also have a war or a political coupe.

Tax implications. You may have a tax burden in the other country as well as in this one. The cost of tax preperation in the other country may offset the gains in it.

I am not trying to disuade you. I  just want to aware of the risks.

 

 

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#3) On May 19, 2013 at 6:00 PM, TMFAleph1 (94.99) wrote:

As mentioned above, Interactive Brokers will let you trade directly on a wide range of international markets:

 Interactive Brokers - Global Offerings

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#4) On May 19, 2013 at 7:22 PM, tomlongrpv (71.13) wrote:

The interactive brokers seem to just offer Europe and Asia and not Latin America and Africa.  In any event most of my portfolio is trapped in my firm's retirement plan and must use the existing broker and so is limited to US exchanges and OTC.  Also my accounts are tax deferred so except for the occasional withhold I run into on foreign dividends (usually avoidable by taking stock in lieu) I don't have major tax considerations.

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#5) On May 20, 2013 at 3:27 AM, TMFAleph1 (94.99) wrote:

Realistically, the only way you'll be able to access Africa is through Africa-/ frontier market-focused mutual funds.

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#6) On May 20, 2013 at 10:25 AM, jiltin (26.89) wrote:

IMO, the best is to try locally first as you will get lot of information which is essential for you to invest. 

Once you master the arts, then you can will find a way to go overseas.

I am also new and I restrict only US stocks. Information is very essentail. Otherwise, you need to choose well known ADR companies.

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