I'm an American who invests in British stock. Is that good or bad?
A lot of them pay good dividends, especially those on the FTSE 100. Is it okay to invest in other countries if you think you're going to make a profit in the long term? How would British people feel if they knew that Americans are investing in their companies?
- Common SenseLv 77 years agoFavorite Answer
Last question first;
" How would British people feel if they knew that Americans are investing in their companies"?
They wouldn't think twice about it. They invest a lot here (USA).
I have some ADR's in British companies. I certainly wouldn't have more than 2%-5% of my portfolio in them. It's fine to invest in other countries, as long as you know the risks. With Great Britain, my number once concern is currency valuation. Changes can easily wipe out any gain from growth or dividends.
(I do have 25% of my portfolio in international stocks)
- cactusgeneLv 77 years ago
It is neither good or bad, and only the final results when you sell those stocks will tell you the answer. Many investment advisers recommend that you keep about 10% of your portfolio invested in international stocks. One problem is that those shares are traded in British pounds and pennies, so you are also exposed to the currency exchange risks. If the British pound declines in price your investment in US dollars loses value, but conversely if the pound gets stronger your stocks in dollar terms are more valuable, independent of the performance of the individual stocks selected.
As to how the Brits would fell knowing some Yanks invested in their company? Well they wouldn't give a hoot. In fact about 140 British companies have their stock traded on the NYSE and over the counter as American depository receipts (e.g. BP, HSBC, Barclays Bank, Astrazeneca, etc. etc.)
- Blazenskyy.comLv 77 years ago
It's good if British companies are doing well along with the currency. In general, UK and US stocks are positively correlated and rise and fall in tandem. It's good to diversify your portfolio. Investing in stocks, would be looked as positively since your backing up companies. They might look at it differently though if your the major or #1 shareholder. Good luck with your British investments. My favorite BTW is ARM Holdings, Diageo and Reckitt Benckiser. Cheers
- ErikLv 77 years ago
investing in foreign companies is a normal part of diversification. I keep about 30% in intl, and have some RDS because of the 5% dividend yield. The UK is one of the biggest foreign investors in the US (used to be #1, not sure whether it currently is, but it most likely is in the top 3).
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- JohnLv 67 years ago
Brits like everyone else likes foreign money....