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Investments Overseas

Do you want to invest overseas? Investing overseas can provide investment opportunities not available in the U.K. However, if you want to discover if international investments are right for you, have a look at our guide and learn everything you should know about their risks and benefits. 

Investing Overseas

Benjamin Franklin once said that an investment in knowledge pays the best interest, and he was right. This is the primary reason why you must always do thorough research before investing, whether it is in the UK or abroad. Having the right information before investing is the key difference between failure and success in investments.

You will need to learn how to make money and most importantly how to hold on to the money you have earned. Since it is only after you have mastered how to hold on to your hard earned cash that you can be able to increase your wealth.

In order to choose an investment option, you must first come up with a clear goal. This means you must know why you are investing and what you expect to get from your investments. The good news about investing is that you do not have to start with a huge amount of money as compounding interest normally allows those who start with small amounts of money to obtain large fortunes after a certain period.

For UK residents, there are a lot of foreign investment options available and they include:

Stock Markets

These are usually the most common investment options. UK residents can invest in businesses around the world by entering the stock markets. Some of the major stock markets in the world include New York Stock Exchange, Japan Exchange Group, NASDAQ, Euronext, Hong Kong Stock Exchange, TMX Group, National Stock Exchange of India, and Bombay Stock Exchange.

Buying shares in any of the above stock markets will enable you to own a small portion of the company that you have invested in. This kind of investment requires you to keep eye on the stock market since you can also very easily lose money. If the company you bought shares happens to drop in value, then that will make the price of your shares to go down. On the other hand, if the value of the company grows, it makes the price your shares to go up too, meaning that if you decide to sell them, you would make a huge profit.

Mutual Funds

This is another investment option that is available to UK investors looking to make money abroad. Mutual funds are usually a portfolio of bonds or stocks that are managed. In this option, you first have to choose the country that you would like to invest in, then you can buy shares of mutual fund of certain companies which will enable you to own portions of the companies’ holdings.

The primary difference between stocks and mutual funds is that while stock shares give you voting rights, the mutual fund shares give you no voting rights in matters concerning the company you own a portion of. Also, a mutual fund is usually a combination of many investments while stocks represent just one holding.

Some of the merits of this type of investment include:

  • It offers professional management- This fund is usually controlled by professional investment managers. Unlike in stocks, where you are the one responsible for doing all the research, investment managers are responsible for conducting research and managing the portfolios, and this makes it hard for you to lose your money.
  • It offers variety- This is because the fund has various asset strategies and classes. This enables you to gain exposure to investments like commodities, stocks, foreign assets, bonds, and even real estate.
  • It is transparent- Worldwide, mutual funds are usually subject to industry regulations, and this help to maintain fairness and accountability for all the investors.

Some of the demerits of the mutual fund include:

  • It offers dilution- As a result of too much diversification, it is possible for investors to have poor or low returns on their investments.
  • It’s costly- Creation, running, and distribution of a mutual fund makes this an expensive undertaking.

Savings Accounts

As a foreign investor, you can also choose to invest in saving accounts. Among all other forms of foreign investments that available for UK residents, this is the one that has the least risk. It involves opening a savings account in a financial institution or bank that is based in a foreign country. This is normally an interest-bearing deposit account which enables you to grow your money. If you want to enjoy high interest rates on your savings, you should consider investing in a fixed account.

Physical Commodities & Real Estate

UK residents can also choose to invest overseas in physical commodities such as gold, silver or even real estate. Real estate is a long-term investment. Before you venture into the field of physical commodities and real estate, you will need to do some research so that you can discover the markets which are deemed to be investment hotspots for the given period. The only setback for this kind of investment is that it usually requires a huge amount of starting capital. This disqualifies many investors.

You can choose to take an overseas mortgage through a UK bank or even an international lender in case you do not have enough starting capital. Make sure you develop properties which are in accessible locations with good local amenities. This way, you will maximise the value of your properties. When it comes to marketing your overseas properties, you can do it with the help of a local estate agent. Other marketing means include word of mouth through friends and family and using dedicated holiday lettings websites.

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