How can you invest in that unique company exploiting lithium in Chile? How can you, as an investor, benefit from growing markets like China or Latin America? Is it worth it? There are opportunities outside North America, and today we’ll discuss the best way to capture them.
- A few decades ago, investing in international was meaningful for better diversification. Is it still the case today?
- There are a few disadvantages to buying foreign stocks. Mike discusses how complicated currency exchange and tax implications can get, not to mention the limited access to the information we need for our analysis.
- Investors could turn to ETFs to get international exposure. Still, this option is not perfect.
- Mike instead decided to keep the stock-picking route as the North American markets show some great options that would give an international exposure.
- The fact that the World is not all connected minimizes the impact of holding foreign stocks in your portfolio. The Meb Faber graph below illustrates the evolution in size of the stock markets.
- How do you select North American companies doing worldwide business? How much exposure is enough to be worth it?
- Mike and Vero give stock examples: Johnson & Johnson (JNJ), Coca-Cola (KO), and Procter & Gamble (PG). However, are they growing enough?
- On the Canadian side, we have companies like Magna International (MG.TO), Alimentation Couche-Tard (ATD.TO), and Brookfield family (BN.TO, BIPC, BEPC).
Some of the stocks we mentioned today have been discussed more in-depth in the video below.
Dividend John’s portfolio is a great example of how a simple strategy can turn into great results, no matter the international exposure. Here’s the interview Mike did with him.
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