Get a better understanding of what international stocks are and how you can incorporate them into your trading or investing strategy. 

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Why invest in international stocks?

Its almost impossible to avoid international exposure in today’s globally interconnected economy. With more than half the worlds market capitalization now lying outside the United States, international stocks present a wide range of opportunities simply unavailable with domestic stocks. Many leading stock exchanges are based outside of the U.S., offering investors potential to expand and diversify their portfolios with securities in both emerging and well-established markets. Global diversification can help you manage risk and position your portfolio for long-term growth. 

Risks of international stocks

In addition to different trading regulations and protocol, international stocks also carry their own unique risks that investors should consider.

  • Currency fluctuation

    While currency fluctuation can work in favor of the U.S. dollar, it’s always a variable and investors should be prepared for favorable and unfavorable outcomes.

  • Political instability

    Investing in international stocks is investing in the people and governments where the foreign shares are located. Political or economic events in a foreign company’s home country may harm your investment.

  • Regulatory changes

    International stock exchanges have their own rules and regulations for participating countries and organizations. Changes in governance and financial policies can create limitations on the access rights of foreign investors.

  • Taxation

    Taxes on international investments are often taxed at different rates than domestic holdings. Similar to regulatory changes, some foreign nations may also impose additional taxation on foreign investors.

How do I start investing in international stocks?

Your approach to investing globally depends on what type of investor you are. In addition to ADRs and foreign ordinaries, investors seeking global diversification should consider exchange-traded funds (ETFs) and mutual funds with concentrations in international holdings as well as other non-traditional investments such as international REITs. You can invest in international stocks on your own with a Schwab One® brokerage account or call our Global Investing Services team at 800-992-4685 to speak with a dedicated broker about foreign trading.1 Our team is available between 5:30 p.m. ET Sunday and 5:30 p.m. ET Friday.

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