Consider going global in weak market sentiments

Consider going global in weak market sentiments

On a regular business day, just as Bursa Malaysia draws to a close at 5pm, markets in the United States are getting ready for trades in roughly three hours’ time, giving meaning to the phrase “making your money work harder.” For not only can one trade for eight hours in the local market, there are opportunities to trade throughout 24 hours now. Which means there are always opportunities to be had in another market.

What are the upsides to trading in a foreign market?

Besides the element of risk which is prevalent in any form of investment/trading, choosing to trade in a foreign market has some smart and attractive upsides:

  • Lower overall risk in your portfolio
    By diversifying your portfolio, you are effectively spreading your risk across the markets so that even if one market underperforms, another one might not – no more putting all your eggs in one basket! Therefore when one market is not performing up to expectation, one can easily switch and move on to the next promising one. Furthermore, a variety of financial instruments for investment/trading, which are not available locally, exists in other global markets giving you more choices for diversification.
  • Potential for higher rates of growth abroad
    Different economies/markets grow at various rates, some faster, others slower because of unique geographic and economic factors such as population, household income, natural resources etc. For example, some regional economies have enjoyed growth rates that are in double digits. Why pass up on the chance to take advantage of a growing economy? With online trading, you can easily and conveniently access growing markets from the comforts of your home.
  • Added layer of foreign currency is potential for higher gains
    When currencies fluctuate, there is always a chance to gain both ways – when a foreign stock price rises, you will gain from the price increase as well as favourable forex rate movements. This gives you an added edge with double wins on both fronts! Of course, the reverse is also true as well with the possibility of erasure in gains because of unfavourable forex rates.
  • The world is your oyster
    It’s counterproductive to limit yourself to the local market only when you can also consider foraging into and taking advantage of markets in other regions. You may be missing out on more than half of the world’s markets when limit yourself – to your loss! So, check out the markets that are available. RHB Investment Bank offers online customers facilities to trade top global markets such as NYSE, NASDAQ, AMEX, SGX and HKEx.

Consider global trading as a form of investment diversification. Although there is an element of risk, there are benefits to be had from global trading.

Speak to your Dealer’s Representative / Remisier today. Or contact our Call Centre at +603 2071 9000.

 

Sources:

https://www.barclaystradinghub.co.uk/home/international-equities.html accessed on 19 October 2015

http://www.schwab.com/public/schwab/nn/articles/Why-Invest-Internationally accessed on 19 October 2015

https://onlineinvesting.westpac.com.au/Public/Trading/InternationalShares.aspx accessed on 19 October 2015