From my experience, many don’t venture outside of their comfort zones. It has taken me a couple of years before I dared to venture beyond the Singapore and US markets. When investing many choose to invest in companies close to their hearts and mostly within some distance of geographical proximity. It may not be a bad thing to invest in things that you are familiar with. In fact, I am an advocate of investing in things that you are familiar with. However, for the reasons that I will now list, I believe that it is always good to keep an open mind and wallet to invest in companies beyond our country(ies) of comfort.
1. Greater Diversification
The first reason is that you will have a more diversified portfolio. If you are already familiar with the concept of not putting all your eggs in one basket, you will probably already have diversified your portfolio by allocating your capital into shares from different sectors. Or perhaps you have taken it one step further and diversified by allocating your money into different asset classes such as real estate or commodities. So why not take it one step further and diversify by choosing stocks in different countries. If you were heavily invested in China recently you would have found your portfolio to be down around 20%, especially if you were invested in the larger cap Chinese stocks, this year because you chose to stick to one geographical region. So do look abroad for more opportunities to grow your wealth and make sure that you do not suffer because of a single country’s misfortune.
2. More choices
If you are only looking at the Singapore market, you are missing out on 98% of the world’s shares! The global market is huge with many opportunities in many other countries. There are many countries with listed companies that are working towards amazing and crazy new innovative ideas with a different set of resources available to them. The global market is huge and it would be silly to discount it off your list because you are not familiar with it.
3. Knowledge Gained
If you research before you buy shares, which you should be doing and I would be shocked to find out otherwise, then you will find that you will learn a lot from researching businesses that operate overseas. You will learn about government policies affecting business, operations that do not take place in Singapore or country that you usually invest in and how the market reacts differently to the same pieces of information in different countries. The knowledge will also help you when you want to make friends from those countries because you know about the companies that are close to their hearts.
To learn more you should definitely check out:
There will be 2 entire areas dedicated to the international markets. First, there is The Trading Zone which powered by TD Ameritrade and CME Group. They have brought in a couple of high profile speakers such as Scott Connor, Executive Director of Education, TD Ameritrade, amongst others, to present and speak in panel discussions on the American and local markets. If you go, and should go, you will get a chance to win an iPad by visiting The Trading Zone and/or TD Ameritrade’s booth!
The second area is the ASEAN Pavilion which is sponsored by Maybank Kim Eng. For the first time in INVEST Fair, they have brought over people from listed companies from the ASEAN region so here’s your chance to interact and speak with the team directly! To get a chance to do this, go and register at: https://goo.gl/xu6HX8
With our code CAPITALISTLAD to get triple chances at winning a prize at the INVEST Fair Lucky Draw! INVEST Fair 2018 is happening on the 25th to 26th of August at Suntec Convention Centre Hall 405 – 406 and entry is free so do go and enjoy yourself there!