Foreign Investors Group

American investments for foreign investors can be a lucrative and profitable financial venture. Even when global economies are suffering and not doing well, there still are many investment opportunities to make money in American investments within the USA. The United States is still a world economic power for investing and it’s smart for investors living outside the United States to consider investment projects within the American borders.

For many years, investors all over the world have invested in many other countries investment projects and the opportunities are still there. International Investments are still a good idea for many and allot of times, their may be tax benefits and other features of an investment that can be good for investors. 

International investing for investors living outside the USA can make lots of money and can be a great investment idea. For example, Real Estate projects are available for investors that can make them an excellent profit. Investors may not realize that Real Estate projects can bring in excellent monthly profits from 12-18% dividends.

In these type of American based investment projects, the international and global investor can invest their money in a large community or business project or residential development investments and then they can have their profit or monthly dividends automatically direct deposited into their savings account.

America is still a viable and worthy place to invest your money. Investing overseas is a term relative to which side of the ocean your on. If you live outside the United States and are interested in investing in the USA, you should look at all the options available.

There are other types of investment projects available such as Trust Deeds. These can be solid investments also and just as lucrative as Real Estate investing in America. Again, the advantages can be many and for those investors not living in the United States, it can be a smart place to put your money to make more money. International investments are something to consider now and in the future.

I did a search for “american investments for international investors” and one company that came up was EQlibrium Investments at http://www.eqlibrium.com/ &  http://www.eqlibrium.com/international-investments.asp

The benefits of international investing cannot be denied. There have been countless articles

and papers written on the subject already that are beyond the scope of this article. But what

exactly is the best method of gaining international exposure in your portfolio? Should you consider exposure to foreign companies via American Depository Receipts or are mutual funds

a more optimal solution?

American depository receipts (or ADR’s) are securities created by a U.S. bank that represent

shares in foreign companies that are held at the bank. An ADR may represent a portion of a

foreign share, one share or a bundle of shares. ADR’s themselves are not stocks, but certificates held by U.S. banks. Like U.S. common stock, ADR’s trade on U.S. stock exchanges and pay dividends (subject to U.S. taxation).

ADR’s, like most foreign mutual funds, are denominated in dollars, but they do not eliminate the potential currency risk associated with investing in foreign markets. So, when the dollar is weak, investment returns in foreign positions are usually more robust. Inversely, when the dollar rallies against foreign currencies, ADR’s from those countries will fall more than if shares were held by direct investors in the company.

Unfortunately, if your objective is to achieve global diversification in your portfolio, ADR’s are quite limiting. When you buy an ADR, you are gaining representation in one foreign company,

a concentrated risk by most prudent standards. Furthermore, most ADR’s are limited to mid to

large capitalization companies. So, even if an investor owned every traded ADR on the

exchange, he/she would end up owning something similar to an EAFE index, but at a much

higher acquisition cost.

We can all agree that the purpose of including foreign stocks in a portfolio is to control risk and maximize return. However, these dual objectives cannot be obtained solely with international large cap exposure (which is all that the ADR would provide). In order to accomplish your goal you should also include foreign value, foreign small, foreign small value and emerging markets. These simply cannot be attained with ADR’s.

So, for access to foreign markets, international mutual funds are a better alternative. They

have the ability to provide broad global representation while spreading risk across hundreds of companies, sectors, and countries around the world. The aforementioned asset classes like foreign small, foreign small value et al are all available to investors.

It should be noted that because international stocks are more costly to trade, foreign funds

typically carry higher expense ratios than their domestic counterparts. Furthermore, the

dividends of international stocks are subject to foreign taxation—even when the recipients are

tax-exempt in the US (like a pension plan). Taxable investors, however, can receive credits for foreign taxes paid. Of course, cost conscious investors should consider global index funds or exchange traded funds to keep costs to a minimum.

Yet despite the potential cost and foreign tax implications, international mutual funds (unlike

ADR’s) allow investors to capture a broad array foreign exposure. When soundly combined with

other domestic asset classes, international exposure is an essential building block in any

optimal portfolio, and mutual funds (not ADR’s) provide you with the best tools to achieve that

goal.