4 Tips for investing offshore
Offshore investments can be rewarding. If you’re considering moving your money overseas, it’s important to keep certain insights and tips in mind.
There is a lot of hype around investing offshore and its benefits. And while the investing offshore argument stands tall, it’s essential to consider your specific reasons for making the investment decision and to stick to a few basic investing principles before jumping aboard.
Offshore investing tips
1. Do your research
Be realistic about your current financial position, your risk profile and your investment objectives, and then research and compare offshore funds that are available to you. Match your investment requirements and time horizon with appropriate funds to ensure that your investments are suitable for your financial situation.
Read educational and news articles: expose yourself to as much information (performance, fees and monthly commentary) around offshore funds as possible.
2. Broaden your horizons
Investing offshore allows for a well-diversified investment portfolio as you have access to different economies and regions as well as a broader selection of companies that may not be available locally. This can help to protect capital losses and reduce volatility as different investments perform differently under economic pressure.
There are three main investment asset classes: cash, bonds and equities. Ideally, you want to be exposed to all three classes in both a domestic and international capacity. The exact mix of your portfolio depends largely on your financial profile.
3. Think long-term
It’s no secret that markets rise and fall, and it’s important to stay invested in your funds (as opposed to switching between investments).
Be patient, have a long-term time horizon and be willing to accept some currency risk. It’s better to stay invested in your funds through long-term investment cycles in order for them to deliver on their investment potential.
4. Ask for advice
The structuring of your investment portfolio is critical and largely depends on your personal financial profile. It’s worthwhile speaking to a professional financial advisor before making any final decisions to ensure that your portfolio is well-diversified and suitable for you.