If you want to start investing in the stock market, you have two options open to you. You’ve either got to go it alone and make your own investments, or find a broker to do it for you.
This sounds easy on the surface, but if you want to invest in foreign stocks you may want to think about using foreign stock brokers instead of those in your own country. Of course some stock brokers do deal in stocks outside their own country – a lot will depend on the size of the company the broker works for and whether they deal in such markets. So this is worth a look before you do anything else if you are already using a broker.
But if you’re starting from scratch, here are some tips for using stock brokers based abroad that are well worth bearing in mind.
Look around and do your research first
It’s wise to suggest you don’t just jump in and select the first stock broker you come across. There are plenty of them out there, and if you’re selecting one in a foreign country it can be even more difficult to know whether you’re picking the right one or not.
Fortunately the internet has made the world even smaller than it was when we first started using commercial airplanes. Use it to your advantage and research each potential broker you are considering using. Use more than one source to find out about each too.
How easy is it to contact them?
If you chose a broker in the US you’d be able to pick up the phone and call them without worrying about hefty phone charges. This doesn’t apply for foreign based brokers.
In addition, you need to consider whether there might be a language barrier. This won’t apply in all countries, but if you’re in the US and you’re thinking of using a stock broker based in China you might have a problem.
Consider the conversion rates for charges
Remember too that conversion rates will apply if you’re converting your US dollars into a foreign currency. Make sure you work out some sums and find out what charges will be levied if you opt to go with a particular broker. This alone can make a big difference to what you make on a successful deal.
As you can see there are several points worth thinking about before you dive in and find a foreign stock broker. Alongside all the regular points to consider, there are several more that become more important when you want to hire a stock broker in another country. If you think about the above points and make sure you know the process to expect before doing anything, you’ll stand a much better chance of making this task easier and more successful.
There is a lot that could go wrong when you go down this route – but equally there is a lot that could go right as well. Make sure you pick the best outcome by doing your homework first.