How Hard Is it to Buy Foreign Stocks?

Tony Sagami

That's one of the most common questions I hear and one that shows how intimidated many U.S. investors are by investing in foreign stocks. What's sad is that it is easy, simple, and inexpensive to invest in foreign stocks.

A service from Fidelity makes foreign investing even easier.

But first, let me tell you that you don't necessarily have to invest in a foreign stock exchange to buy foreign stocks. I say that because THOUSANDS of foreign stocks are listed on the New York Stock Exchange and the Nasdaq.

Big companies that you've known for years, such as Toyota (TM) of Japan; Nokia (NOK) of Finland; Michelin (MGDDY) of France; Siemens (SI) of Germany; and British Petroleum (BP) of Great Britain are available.

And not just mature, established foreign markets either. FACT: Did you know that there are more than 100 Chinese stocks listed on U.S. exchanges? Huge, multi-billion-dollar companies, such as China Mobile (CHL), CNOOC (CEO), China Life (LFC), PetroChina (PTR) ... and many more.

As you can see, it is easy to invest all over the world with your current broker. However, as nice as it is to have all those U.S.-listed foreign stocks available, many of the best foreign stocks are traded on their home markets.

If you really want to hit some investment home runs, you need a broker who has an international trading platform. As I said above, a NEW service from Fidelity is going to make that easier for millions of American investors.

Maybe you've seen the new Fidelity commercials on TV, but here are the details. Fidelity Investments is expanding its online-brokerage services to allow investors to trade foreign stocks and foreign currencies in 12 markets and eight currencies.

Those countries are Australia, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Netherlands, Norway, Portugal and the United Kingdom.

Access to the Hong Kong exchange is particularly important because it is the trading portal to China.

Fidelity gives investors the option to price their investment in either U.S. dollars or the local currencies. The trading commissions, which can be as low as $30, are paid in local currencies.

Fidelity even offers some of its vaunted research on foreign companies as well as company-specific news and real-time foreign quotes.

Fidelity knows its way around the investment block, and this international trading service is part of an increasing emphasis on international investing.

Fidelity isn't the only U.S. discount broker that offers international trading, though. E-Trade has offered international trading for six markets — Canada, France, Germany, Hong Kong, Japan, and the United Kingdom — since 2007.

The biggest shortcoming to both E-Trade and Fidelity is that they don't have trading to all of the exciting Asian markets, such as Indonesia.

Several months ago, I took a five-day trip to Indonesia, and I was blown away by the economic growth I saw. Indonesia has the fourth-largest population in the world and is growing by leaps and bounds.

Indonesia is rich in natural resources, especially oil and coal. How rich? Many people don't realize that Indonesia was the only Asian member of OPEC until it voluntarily withdrew in 2008. The country withdrew because its economy was growing so fast and that it was making such good use of its own oil, it didn't need to export it any more.

Neither E-Trade nor Fidelity can handle Indonesia trades, so to invest there, you should take a look at companies like Euro Pacific Capital (www.europac.net) or Boom Securities (www.boom.com).

Boom Securities, based in Hong Kong, offers trading in Hong Kong, Japan, Australia, Indonesia, Korea, Malaysia, Philippines, Shanghai B, Shenzhen B, Singapore, Taiwan, and Thailand.

International investing has never been easier ... or more lucrative. Get on board!

Regards,

Tony


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Posted 02-25-2011 9:52 AM by Tony Sagami