 |
On top of the above, there is also currency risk involved. Investors should be sensitive
to xchange rate fluctuations. Foreign currency swings can affect the performance
of the fund managers/funds if not properly managed. The returns of your investment
could easily be translated to a loss because of exchange diferrences.
A local investor without access to a host of information will be limited in their
decision-making. It is preferable if you can get professional help. If you are planning
to invest in a foreign country, then it is best to look for a mutual fund that invests
specifically in that country.
You should study in detail the fees or marketing charges which can siphon off a significant
portion of your investment. An investment advisor will be the right person to guide
you.
Some of you who have experience in investing in overseas markets for diversification
may have found that the desired returns could not be achieved. How can that happen?
Short-sighted local investors tend to evaluate the performance of their investments
over a few months rather than over a few years basis.
If you are investing abroad, you should prepare yourself for greater volatility and
you should be doing it for long-term prospects. Do not be overly conceived about
short-term volatility.
If you are investing in any of the foreign trust fund, you should practice patience
to see your capital to grow over a longer term period let say 3-5 years. Surely,
you cannot quickly dismiss your investment as a bad apple just after 6 months (assuming
you have done enough homework before investing). More importantly, you must be sensitive
to the rapid change of the global environment.
You would not be convinced by a fund manager who performed remarkably well over a
very short-time period. He could just be an absolute loser at the end of the day.
When you invest in the foreign markets in particular, you should not adopt the "in-and-out"
strategy to make quick profit. Resist any temptation for short-term gains.
International investing is beneficial for long-term investment safety - the conventional
wisdom of today's market. International investing could be profitable, but often
it is not the investment tbat does not produce returns, but rather investors who
are too hungry for results. They slam the investment after failing to get quick results.
You have to be a long-term investor when investing overseas.
Lastly, if you are investing abroad wbich is more complicated than the local stockmarket,
make sure you are able to face a higher level of risk. To conclude, be a long-term
investor when investing overseas.
|
