Dear Financial Voice Reader,
Did you know you can buy the shares of the best global stocks and put them into your SIPP, ISA, or another pension plan? People do not know that, and they do not know how to do it, or even find out which stocks are out there.
Of course, American companies you've heard of like the following (with their six-month returns in brackets at the time of writing)
Microsoft (11%)
Alphabet (21%)
Disney (42%)
Amazon (21%)
Facebook (16%)
Apple (38%)
But what if you want more than US tech? What about Chinese companies or Indian, and what about outside of tech? And quite right too.
After all, look at these, their 6-month return and country of origin)
Alibaba (15% China)
JD.com (80% China)
Pinduodua (140% China)
Infosys (70% India)
HDFX (55% India)
Tata Motors (90% India)
Or you could go more exotic - MrcadoLibre of Argentina is up 70%.
But wait? Isn't that difficult? No, all these are listed on the US exchanges, and you can buy them the same way you buy BP or Lloyds shares. And aren't these risky, tiny companies? Surely there is not much information about them, and what about currency risk?
As the internet allows us a window on global finance through the browser, I want to own more foreign stocks.
Why should we miss out on owning some world-beating stocks producing exceptional returns just because we do not have the often ten of thousands of pounds needed for a private client account with a major investment bank that would allow us to access global markets?
Or overpaid fund managers with high fees and narrow focus, when we can have the freedom ourselves.
Online investing allows us to trade foreign stocks cheaply, efficiently, quickly, and easily through American Depository Receipts (ADRs).
ADRs are dollar-denominated US securities backed by and related to the underlying company stock - which may for instance, be UK listed shares or Indian ones or Brazilian. The price of the ADR and the underlying stock will generally move in tandem. Only large companies tend to have these.
Of course, in place of trading ADRs, we could always open multiple foreign online trading accounts with different brokers, holding them in other currencies - facing conversion costs and of course learn the language of each country since their e-broking sites often are not in English. Try E*Trade Korea - www.etrade.co.kr for a taster of the difficulties. Not for me!
Of course, with the ADR, you have the currency risk of holding dollars and the conversion costs involved. But if you intend to put away for several months a pool of money for trading in dollar stocks and don't plan to convert back and forth, those costs and risks can be minimised.
The practicalities of trading ADRs are straightforward. It is just like trading any US security. You would use a UK e-broking account. And if you don't have one yet, then I suggest looking at my free site www.investing-champions.com
Time now for me to return to my portfolio and plans for global domination.
My own global compnies I like based on their valuations, growth prospects, dividends, profitability, cash flow growth:
T Rowe Price, Asbury Auto, Volex, Alpha FX, Vipshop, UnitedHealth, Medifast, North Media, Dover, Garmin, Crocs, Factset, LVMH, Marshalls, Neste, Paycom.
