Investing Online For Dummies, 7th Edition

Chapter 20. Broadening Your Horizons: International Stocks

In This Chapter

• Boosting your success with international and emerging markets stocks

• Understanding the risks and rewards of international investing

• Discovering ways to invest in individual foreign stocks

• Investing online in international stocks with mutual funds and exchange-traded funds

Thanks to the Internet, it's just as easy to invest in a small company in China as it is to buy shares of a giant U.S.-based company like General Electric or Coca-Cola. Efficient trading systems plug you into global stock markets and let you pick and choose international stocks that can instantly broaden your portfolio.

The Internet has cracked open global investment opportunities to online investors. The change is truly a breakthrough. International investments offer the ultimate in diversification, allowing you to spread your money around the globe and reduce your risk. By diversifying with foreign stocks, you can protect your portfolio in case a problem hits U.S. markets. The financial crisis that erupted in 2007 and 2008 showed that if an economic shock is big enough, nearly every country will feel the pain. Even so, international stocks tend to wiggle a bit when U.S. stocks jiggle, offering enough protection to make international investing worth the trouble.

In this chapter, I show you the benefits and unique risks of international investing. You also find out the different ways to add international stocks to your portfolio. Finally, I point ...