Friday, April 15, 2011

Investing in international stocks

There are many good companies all over the world. If you have more than enough money, you can consider casting your net for super stocks out wider. The problem with buying stocks overseas is that there are many hidden costs such as with holding taxes as well as foreign exchange risk. That said, Singapore's stock market is the home of many small companies that may not make the leap to the big stage, and existing local blue chips may have already been priced in with little upside.

In my opinion, look towards the European countries as a starting point. This is because there are plenty of mature firms looking to penetrate the emerging economies, and they look more likely to succeed compared to those from China and even Singapore. If you are cautious, then Malaysia could be the safer alternative as companies listed on the Bursa Malaysia can tap into a large and growing economy. Furthermore, it has been less correlated with the Singapore stock market due to the capital controls and bumiputera requirements imposed there. Just some thoughts.

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