Did you know that the combined value of all worldwide tradable stock is currently $93.7 trillion? Investing and trading international stocks has helped many economies to grow by giving companies the capital they need to start or grow their operations. It’s not only companies that benefit, however, but also the people who make the investments.
If you want to start trading or only hold stock on your local stock exchange, this article is going to make a case for the international stock market. Keep reading to find out what the additional benefits are.
1. Owning Stock is a Great Source of Passive Income
Saving money in the modern world is more complex than using a piggy bank. You have to put your money in a place that gains interest that matches or outperforms your inflation rate for your money to actually keep its value. Owning international stock in established or growing companies keeps your money’s value safe and you also get dividends in multiple currencies.
2. International Stocks Free You From Your Country’s Circumstances
Different political administrations and events can have huge effects on a society’s stock exchange performance. If the regime in your country makes it difficult for businesses to flourish, holding foreign investments is a great way to keep your money safe from local fluctuations.
3. A Diversified Portfolio is a Safe Portfolio
Rule number one for seeing growth in any financial venture is diversification. The more differentiation between your assets the better, and that also counts for the stock exchanges you trade on. If one or two markets experience a downturn it doesn’t affect you as negatively if you are invested in five or six.
4. Some Countries’ Economies Grow Faster Than Others
Developed economies grow at a much slower rate than developing economies. If you’re invested in successful Thailand stocks chances are that the value of your stock will increase quicker than a US company’s stock. Prospective investors willing to check it out may find stocks that are outperforming whatever is listed on their domestic market.
5. A Single Currency is Volatile
Currency fluctuations can work for or against you when you only work with one currency. A climb may increase your purchasing power, but a drop decreases it just the same. If you hold international stocks then you can buy and sell stocks according to whoever has the strongest currency at the time.
6. More Choice
Having access to the entire world’s stock gives you many more options to choose from. You can tailor your investment style to your needs: buy and sell rapidly to make money or invest in companies long term to save and accrue wealth.
7. Global Growth
If you look at a chart of the global stock exchange you’ll see that it tends upwards (even if there are periodic dips). Holding worldwide stocks is a great way to have your money grow in the same way over the long run.
Is International Stock Trading Worth It?
In the short term, it is more difficult to keep track of all nations’ current affairs, and that can make trading international stocks overwhelming. However, in the long run, there are so many choice and safety benefits that is overall a wiser practice to get into.
Stock trading isn’t the only good financial skill. Check out the rest of our articles to find more tips about making and saving money, as well as other lifestyle hacks.