There are numerous ways to invest in Asia. Stocks and real estate are still the main things most individuals think of when it comes to investments. The good thing about buying stocks is that you can start with a small amount of capital, unlike buying real estate. Another important aspect about investing in the stock market is that you don’t even need to leave your home to participate.
Most online brokerages will allow you to buy and sell stocks on major international exchanges. If your current brokerage doesn’t allow this then you may wish to change to one that does allow it. Both Singapore and Hong Kong have many decent brokerages, who all offer different rates and charges. There are many articles available on the internet that compare the best online brokerages for 2017. Not surprisingly, the United States has the highest concentration of stocks in Asia outside of the continent itself. Therefore, one may wish to consider opening a U.S. brokerage account to access a larger market, however, one should note the currency exchange rates when using an overseas brokerage.
Use a local account to trade stocks in Asia
If you solely want to focus on the Asian stock market then you shouldn’t use an American or European account to trade stocks. This will leave you vulnerable to competing against multi-million dollar hedge funds, who use highly complex algorithms and highly skilled researchers. Furthermore, don’t just look to invest in China. Hopefully, the brokerage that you are currently with or thinking of joining will allow you to trade in China, Japan and Korea. However, it’s also worth buying stocks in emerging markets like Vietnam and Malaysia. Vietnam is moving from a controlled economy to a market economy, where it is joining the world marketplace. Its agricultural assets have become a significant export and it is attracting foreign investments. Thailand, another emerging industrialised economy and the second-largest economy in Southeast Asia is another market worth considering.
The stock exchange of Thailand (SET) lists over 600 companies that represent a market capitalisation of about $13 billion Thai Baht. SET is an automated trading platform that integrates with other trading platforms such as NASDAQ.
Lower fees = better results
Having the ability to invest in hidden gems isn’t the only reason to open a local brokerage account in Asia. It will also save you a lot of money in fees. Brokers usually charge a high commission when investing in international trades.
Online personal investing gives you full control of your portfolio. This means trades can be executed immediately during trading hours, as opposed to trading through a broker, who will need to be notified on whether to buy or sell stocks. However, on the other hand, brokers are professional traders and thus should preclude you from making a bad investment. Professional brokers normally charge substantial fees per transaction and take a percentage of the overall profits. Unfortunately, traders can also make bad decisions, as there are no guarantees on buying and selling stocks.
A tip for starting out in investing
If you are a newbie to the world of buying and selling stocks it may be worth investing in a good investment book. One of the most successful investors of all-time Mr Warren Buffett recommends all investors should read “The Intelligent Investor” by Benjamin Graham. This book is a little dated when it comes to working with the current stock market, nevertheless the fundamentals that the book explores are essential to any would be investor. Another interesting read for a budding new investor is, “How To Make Money In Stocks” by William J. O’Neil, who is the founder of Investor’s Business Daily. There
There are a plethora of excellent books that delve into the heart of investing and hopefully you will find the one that works best for you.