One of the best ways to diversify your equity portfolio is to invest in international stocks. While international stock investment opportunities offer varying levels of risk and reward, it is an easy way to increase your portfolio’s international exposure. Many experts recommend a 5% to 10% allocation of foreign stocks for conservative investors, and up to 25% for aggressive investors. You can access foreign stocks through direct investing, ETFs, or mutual funds.
If you’re unsure how to invest in international stocks, index funds are an excellent way to start. These funds track international stocks and are easily accessible through most brokerage accounts. However, if you’re new to foreign investing, it’s advisable to build your portfolio slowly. One good strategy for this is to use dollar-cost averaging, which means buying investments on a regular basis.
The Vanguard FTSE All-World Ex-U.S. ETF is the least expensive way to invest in international stocks. It is a global index fund, and its holdings span 23 developed nations. This is one of the most popular options, and you can invest in these funds without having to worry about investing in individual stocks.
Purchasing international stocks is a great way to participate in the rapid growth of several regions. However, it is important to remember that investing overseas comes with a number of risks. Some of the biggest risks associated with international stocks include currency and geopolitical risks. However, it is important to consider your risk tolerance and investment objectives before making a decision.
