Have you considered making global investments? Australia’s total overseas investment in 2019 is about AUD3 trillion, according to the Australian government. The United States (US) and United Kingdom (UK) are among the world’s largest economies, which provide a wide range of investment opportunities. Whether you’re making retirement investments or other types, here are some of the main benefits of investing in a global listed investment company.
Offsetting Downturns
A nation’s economy and specific markets function in cycles. Investing in multiple foreign countries, like the US and UK, provides better overall returns when one country or stock within that country experiences a downturn.
Diversifying investments is especially ideal when making long-term investments, like for retirement. In that case, it’s critical to consider the long-term over short-term returns. When making overseas investments, you can experience this benefit along with long-term investments in Australian stocks, for example.
Investment Growth
You have a greater chance of investment growth when you invest globally versus just in Australia. This provides an opportunity to boost your return potential by leveraging foreign investments.
It’s normal for all countries to experience downturns due to economic cycles. When they happen, you can still receive returns on foreign investments that balance out your total investments.
Market Exposure
This is one of the main benefits of overseas investments for Australians. For example, the US has the world’s largest economy, while the UK is ranked among the top 10 largest economies.
When you invest overseas, this provides you with exposure to such economies. According to Global Peo Services, Australia is still an excellent investment since it’s among the world’s Top 15 largest economies.
When making long-term investments, you should consider combining local and foreign investments to maximize earnings.
Market exposure from foreign investments provides new opportunities through diversification. This includes options like Berkshire Hathaway, which has a net worth of over AUD694 billion. Access to such markets can help to boost your investments much more exponentially.
Financial Protection
When investing abroad, you can avoid many of the financial risks involved with local investments, such as foreclosures. You might be able to receive protection from various risks like seizures. Asset protection is especially important in situations like creating a nest egg for your retirement.
A related benefit is a confidentiality since foreign financial institutions aren’t legally required to share your financial details with other parties. You won’t be exempt from all legalities, but you can receive more freedoms versus local investments.
Earnings Potential
According to the Australian Taxation Office, studies show that international assets only make up about 1.4% (2018) of an average Self-Managed Super Fund (SMSF) portfolio. Meanwhile, such foreign investments make up about one-quarter of the superannuation industry.
This provides a massive potential for Australians making retirement investments to boost investments in foreign economies. It provides a wide range of investment opportunities in various foreign countries like the US
Strong Portfolio
If you want to boost your SMSF portfolio, for example, you can do that with foreign investments in the US and UK. Such countries have strong economies even during situations like the COVID-19 pandemic and Brexit.
This provides outstanding long-term opportunities for boosting returns and strengthening your investment portfolio. It’s critical for situations like investments to secure a comfortable retirement.
Investing in a global listed investment company can provide several benefits, including investment diversification, offsetting downturns, and a stronger portfolio. It’s always important to think about all investment options in a global economy, including those outside Australia.
