That’s why look beyond the border in investments

Are you thinking about invest abroad? Are you wondering if it could really be a smart thing to do or if it might be important for you to look elsewhere in investing?

The Italians they may be interested in investing abroad for several reasons. If you are interested in this topic, you just have to continue reading the article.

Let’s start!

Foreign markets

When looking for a country to invest in, one often looks at the size of the country itself, the potential growth of the markets, but also the environment, and in fact we try to understand if that specific economy can be the one favorable to investors.

If a state is large and has significant potential growth potential, then it will prove attractive to an investor. If the market will allow you to gain access to new customers and in turn to other markets, it will surely have a greater attraction.

We must also say that investment opportunities abroad can be wider than those present in Italy. Investing abroad can offer Italian investors a greater diversification portfolio management, access to larger financial markets and exposure to other currencies.

Also, investing overseas gives investors the chance to get higher yields than those available on the domestic market.

Finally, investment in foreign countries can also be a way to diversification own risks: this could happen for example thanks to the geographical and sectoral diversification that it could to balance an investment portfolio that would otherwise remain too safe or too risk biased.

The strategy for investing

Invest abroad it can turn out an opportunity really very interesting, but you still need to tread carefully and pay attention, because there are so many factors to consider.

Let’s list some of them:

• General informations: the first thing to do before investing abroad is to inform yourself. Do you want to invest in Africa? Well, ok: first of all you should “study” the place you have chosen, to better understand which business it is based on, which are the most important companies, which are the largest companies, which are the best sectors and which ones should not be considered . It seems trivial, but often people throw themselves headlong into an investment without thinking enough and above all without gathering adequate information, which can also lead them to lose money;
• Politics: a very important thing is to get the best information about the political stability of the country in which you want to invest. If you choose one that is not politically stable or that is experiencing a not entirely rosy situation from an institutional point of view, your investments could be more difficult than expected. It is also important to find a state that has a regulatory framework capable of protecting investors from possible fraud or conflicts;
• Exchange rates: investing abroad involves investing, most likely, in a currency other than that of your country. At this point it will be important to know the economic and monetary stability of the reality in which you are going to invest, so it will be important to control exchange rates and inflation. An exchange rate could be beneficial to us, but also work against us, or too high inflation could devalue the currency.

These are all aspects to consider before making an investment in a foreign country, which allow us to go more lightly and to know the reality with which we are going to interface.

I say this because some nations are more risky others due to various factors, such as political or economic instability, international sanctions, weak market structure, high inflation, monetary instability, and so on.

Tax regulations

We now deal with a vitally important topic, namely a topic related to taxes.

If you invest in foreign stocks, you need to consider the tax legislation of the country in which the shares or funds or in any case the investments you have decided to implement are located.

In particular, you will need to consider the normative which regulate capital gains taxes, capital gains taxes, transaction taxes and dividend taxation rules. Also, you should check the regulations in your country of residence regarding capital gains taxes and capital gains taxes. In addition, you should also consider any bilateral tax treaties between your state of residence and the state where the investments are located.

The obligations are related to the compilation of the quadro RW of the tax return.

I advise you to go into detail better this part with your accountant or in any case to get all the information necessary to do things in order and properly, and not to find yourself having to pay fines.

Emerging markets

I emerging markets they have always been one of the most followed and most chosen markets for an investment abroad.

This is because they are the best choice for diversification and above all because they can bring higher earnings than developed markets.

This is because emerging markets are often more volatile and their economies have higher growth potential. Investing in such markets may also provide potential investors with the ability to diversify their portfolio and reduce overall risk.

It’s important to remember, however, that emerging markets are potentially more risky of the developed ones.

In emerging markets, there is also plenty of room for productivity gains; in fact, it lags significantly behind that of mature economies, but thanks to the improvement of infrastructures and technological advances, productivity could increase significantly, and this could be a very important factor in sustainable economic growth.

Some investment examples

If your choice is to invest abroad per diversification your portfolio, then you can choose to invest in, for example, two or more countries. This could help you reduce the risk of too much capital concentration in one place.

Some States obviously offer a relatively lower risk, such as the United States. In fact, the best shares in the world are concentrated here, those of the most capitalized companies.

Other countries however are emerging markets but by now they can count on solid economies that calling them emerging might almost seem like an inaccuracy.

The Chinese in fact it is an emerging market but it can really count on many important companies.

Africa is also a reality that has been attracting many investors lately, and it might be a good idea to take a look at it.

You may be thinking about investing with ETF in Africasafer and less expensive than shares as with a fund you will be able to buy several companies at once and therefore better diversify.

If you are more inclined to risk, you could also take a look at this article which talks about Vietnam ETFsa nation that has attracted the attention of many investors in recent years, which however still has many hidden risks within itself, so it is more suitable for investors who are aware and able to bear any losses.

Even the Middle East is one of the emerging markets that are attracting the attention of investors.

As for America, the Canada undoubtedly ranks at the top of the list of interesting countries, especially in terms of mining and oil companies.

My Business Opinions

We have reached the end of ours guideso now we will try to understand more about it and draw our own conclusions.

Investing abroad can be an excellent one strategy to diversify your investments and to reduce your risks.

However, there are various factors to consider (as we saw earlier in the analysis) before making a decision.

For example, it is important to examine i regulationstaxes and the state of the economy of the country in which investment is being considered. You also need to consider currency exchange and foreign exchange risk, particularly if you plan to invest in a currency other than your own.

Without a doubt, this is an important choice that could benefit our investments, if taken consciously and correctly.

Some economies are more solid, so they are suitable for investment; others, on the other hand, deserve a little more attention and above all deserve to be studied in depth, but could bring some satisfaction.

The principle to always keep in mind in my opinion is that of diversification. In fact, by diversifying, one seeks to mitigate the risks and not to concentrate them in a single investment, but rather to expand them to avoid losses or even a collapse of one’s investments.

If you are interested in understanding how to start making your way into the world of investments, I leave you these resources that could be very useful:

See you soon!