The ease of travel and the rise of digital markets and communication has ushered in the era of the global citizen. The sheer interconnectedness of society today has made it nearly impossible to be unaware, unconcerned and uninvolved with issues and/or innovations around the world.
Similar to a large puzzle, global citizenship is based on the premise that we are united and connected by the actions and well-being of people around the world. This heightened awareness and responsibility for one another is the ground that good global citizenship is built on.
The international web that the Internet has spun has quickly begun to erase boundaries that once restricted the worldwide interaction between people, countries and even devices. This increased ease of global engagement has also created another byproduct: the borderless investor.
This savvy international stockholder is diversely invested in startups, markets, stocks and even countries. Despite the possibility of being exposed to wider volatility, as a result of investing in multiple international markets, the benefits of global investing often outweigh potential risk.
Global investing is all about informed diversity, as the New York Times explained almost a decade ago as the borderless investor trend was beginning to take hold: “Instead of putting some money into a domestic fund that seeks out the best energy, technology, health care and financial companies based in the United States… an individual investor might look to a globally oriented fund that scours the world for the best opportunities in each sector.”
Wayne Wile is one of a continually growing segment of investment consultants who has built an extensive career in providing guidance in the area of foreign investments.
However, Wayne Wile is quick to note that foreign investment requires increased due diligence. “Getting involved in international markets isn’t for everyone. I highly recommend vetting each new purchase, investment and opportunity thoroughly,” continues Wile, “This may require a more in-depth research phase than investments in markets you are familiar with, and it may require research into the country’s business laws and practices and market history.”
Interestingly, Wayne Wile, who is an avid traveler, advises investors who are interested in global investment opportunities to use travel as one inspiration. “The truth is, traveling and living abroad can expose potential investment opportunities that would otherwise go unnoticed,” explains Wile.
Despite the need for even more thorough due diligence, there are plenty of opportunities for investors to grow their portfolios through global market investments. Some of the latest trends include foreign real estate such as Shanghai real estate, emerging markets, and international equity mutual funds.
Global investing is also gaining momentum amongst those saving for retirement. A report from earlier this year found that 41% of Canadians are investing for retirement in stocks outside of Canada. That number is up roughly 10% from last year and is indicative of the attitudes of many baby boomers around the world.
Startups have also gained popularity in the venture capital sector. Offering promising returns on investments, startups present the opportunity of mixing investment with innovation, which fuels market growth and prosperity.
Diversity is key to a successful portfolio. However, due to recent market volatility, investors may feel apprehensive about global investment opportunities. For those anxious investors, an intelligent rule of thumb offered by financial reporter, Penelope Wang, advises that, “the typical investor should hold 20% to 30% of his stock allocation in foreign equities, including 5% in emerging markets.” A balance like this creates needed diversity without producing overexposure and may offer the most portfolio growth potential.