The Background

For a recent issue of its investor newsletter, a highly respected Wall Street player asked us to research and write this feature story about foreign investments.

The Copy 

Investing Abroad: Is the Time Right? 

Perhaps you're seeking another route to diversification—or a new avenue to growth. And despite the headlines of years past, you find yourself looking overseas.

You're not the only one.

According to the Securities and Exchange Commission (SEC), more Americans have been investing abroad than ever before.... 

Along with the opportunities, international investing can come with risks that you won't often find in the U.S. market:

Currency exchange rates. As you'd expect, foreign companies trade and pay dividends in the currency of their home country. That becomes an issue when you seek to convert the payments into U.S. dollars. If the home currency is weak versus the dollar, you receive fewer dollars when you make the conversion, so your return decreases. Conversely, if the currency is strong, your return actually increases.

Lack of liquidity. You may find it difficult to trade securities in foreign markets. Some markets have lower trading volumes and are only open a few hours a day. Certain countries limit purchases from foreign investors. And finding a buyer when you want to sell is not automatic....

The Players