The stock market is huge, with seemingly countless companies and goods to invest in. Some of the biggest opportunities come from foreign companies. Out of the top ten richest companies in the world, half are American.

Others include companies like Toyota and Volkswagen. That’s just the tip of the iceberg.

You probably use plenty of products created by foreign companies every day, and you may not even know it. For example, did you know Redbull comes from Austria?

With international products being so common in US markets, it should come as no surprise that there’s a lot to be gained by investing in international stocks. We’ll discuss some of the many benefits in this article.

1. Diversification

Diversification is the process of buying stocks from multiple companies, and even multiple countries in an effort to secure your finances. If all of your investments are based in one country, you’re in serious trouble if that country experiences an economic downturn.

There’s also the fact to consider that not all countries have the same policies. For instance, there might be some advantageous policies in place in Puerto Rico that don’t exist in France. We’ll discuss that more later on.

You should also diversify across industry lines. If you’re invested in various soft drink and candy companies and suddenly sugar crops fail among a major supplier, that could also affect you.

2. Protection

Protection and diversification may sound like the same thing, but they’re not. Diversification means spreading investments out in case of bad luck.

What we’re talking about is the protection offered by certain countries and governments. You may have heard about the Federal Deposit Insurance Corporation, more commonly known as the FDIC.

The FDIC insures $250,000 per bank account in the US, so if something happens to the bank, you get back the money you invested up to the amount of $250,000.

Some countries have similar policies with stocks. If something happens to your stocks overseas that isn’t the result of natural market conditions, your money is insured. Examples of these cases include insider trading among company leaders or large investors, dismantling of a company by autocratic politicians, etc.

3. More Options

While there are certainly more options when buying international stocks, there’s more to it than what you can find on American markets. Choosing to buy stocks online gives you access to companies that might be localized to their own markets, or aren’t as well-known outside their native country., for instance, gives you access to markets all across East Asia and Oceania. This is quite useful because some of the largest names in the business world are from South Korea, Japan, and China. China is unique among these because Chinese companies aren’t often advertised in the US.

Benefits of Buying International Stocks

Investing in international stocks offers a whole range of new options and possibilities. It allows you to¬† We’ve discussed some of the many benefits of international stocks in this article.

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