Video: How to Invest Internationally

How to Invest Internationally

Video Transcript:

Hey, this is Anne from Magnifi, and today I thought I'd take a look at investing internationally.

Investing internationally is a nice way to add diversification into your portfolio, so you aren't concentrated just in U.S. stocks. When I think about diversification, I usually think about things like fixed income versus equity, things like investing in small caps versus large caps, but you can also look at international versus domestic.

So, in this case, I thought it was super cool that there's actually foreign-based companies that are listed on U.S. exchanges that you can directly invest in. This first one, Alibaba, is a huge Chinese e-commerce website. Shopify is a big Canadian company. You're able to get direct access to foreign companies by investing in these stocks, or if you want more diversification than that, you can always invest in an ETF or a mutual fund. From here we can look at the diversification of what these funds are actually invested in. For this first one, we're seeing the holdings. For example, 53 is the number of companies that this fund is invested in. We could also look at regions, how is it regionally diversified, and we can look at sectors, so how many different sectors is this particular fund invested in?

Running a search for international is a way to find access to that other 75% of the world economy and add some diversification into your portfolio.