When investing, it is very important that you have a diversified portfolio. This way, when there is a market downturn, you will be able to hedge against failing investments.
In order to be properly diversified, you will need to invest in international stocks. While you can get exposure through exchange-traded funds (ETFs), you would be better off utilizing a brokerage firm that lets you directly invest in international stocks.
You want to pick a brokerage firm that is based in the country that you live in, regulated by the government of the country that you live in, and offers international customers the ability to sell and buy stocks.
Things To Consider When Choosing an International Broker
When you are deciding on an international broker, you should look for the same features that you would with a domestic broker. That means that the platform should have a good reputation within the industry.
The platform should also have strong standards for security and access to the markets that you intend to be active in. It’s also great if they have useful educational content, robust trading tools, reasonable costs, and great customer service.
Can a Non-U.S. Citizen Open a Brokerage Account?
In most instances, a legal resident of the United States who is not a citizen of the United States can open a brokerage account based in the country. However, they first need to certify their tax status and complete the necessary documentation.
A non-US citizen who lives outside of the country can open an account if the broker takes applicants from their country of residence.
And this holds true for all countries out there.
Other International Trading Considerations
There is a small group of online platforms that will let you place trades on foreign markets. You will find currencies, futures, bonds, and stocks that you can trade. However, you should keep in mind that there are additional risks like currency exchange rate fluctuations and limited liquidity.
If you are interested in just a handful of international markets, then you might want to think about opening an account with a local broker who lives in the country you want to trade.
The main risk with doing something like this is that regulatory agencies outside of the United States might not be as proactive. Sometimes, a foreign brokerage platform might shut down overnight, leaving you without any of your assets.
The Importance of Knowing How to Choose a Trading Platform for International Stocks
Hopefully, after reading the above article, you now have a better idea of how to choose a trading platform for international stocks. As we can see, there is a lot to consider. But when you do your research, you will be able to choose a safe and trustworthy platform that will work for you.
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