As you gain skills and experience as an investor, you may want to venture out of your comfort zone and see what else is out there for your portfolio.
You might want to consider new asset classes, diversify into other industries, or even look beyond borders and access investing opportunities outside the Philippines.
Becoming a global investor can bring a lot of benefits, but there are things to prepare before you start. Read on below.
How to prepare before you start investing globally
Before diving in, equip yourself with the knowledge and tools that can help increase your likelihood of success:
- Get familiar with global markets
When investing in companies or assets abroad, you need to understand the factors which can affect their performance, like country-specific laws and regulations.
It’s important to do your research on the unique risks and opportunities of the country or market you want to invest in.
Know the current situation in that country, including economic, industry, and company-specific developments that may impact your planned investments.
Some international brokerage platforms offer trial or demo accounts that may allow you to gain global trading experience without risking real money.
- Consider the impact on your money
You may face foreign exchange risk when investing internationally. This means fluctuations in the exchange rate can affect the value of your investment if you’re transacting in a foreign currency.
You may be required to use US dollars and a dollar bank account if you’ll invest directly via an international broker. There are certain fees to pay when trading on global platforms on top of bank transfer fees to add and withdraw money from your account.
Make sure the risks and fees are acceptable to you and that they wouldn’t have a huge negative impact on your potential profits.
What are your options for investing outside the Philippines?
You can invest directly and indirectly in international markets from the Philippines. Some options may even allow you to use your pesos for global investments.
1. Direct ways to invest in international markets
You’ll need to open an account with an international broker to buy foreign assets directly. There are platforms that allow you to do this online.
After creating your account, you must add money to start investing in products like stocks, bonds, and pooled funds, among others.
You can consider a direct method if you’re confident in your investing skills and want to make your own decisions. This may also appeal to you if you like the idea of owning a specific asset, like stocks of your favorite multinational brands or companies.
2. Indirect ways to invest in international markets
You can also put money in foreign assets without looking far. There are pooled funds from local banks or investment companies that include international assets like stocks and bonds.
Some are focused on specific countries or regions while others follow a particular theme or mainly invest in certain sectors.
They provide exposure to global markets while being managed by local investment professionals. These investment funds may allow you to invest using your Philippine pesos or US dollars.
This indirect method is ideal if you don’t have much time to research foreign investment options or keep a close watch on global events.
Just remember to stay updated on relevant news every so often in case there are developments or opportunities you may need to act on.
