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Getting the balance right with your offshore investments

by , 09 June 2015

It can be hard making decisions about your offshore investments.

You want to strike the right balance and see capital growth.

If you want to invest in funds, what are the pros and cons of investing in unit trust funds and hedge funds?

Read on to find out…


Aiming for growth with your offshore investments


By investing offshore, your goals will be similar to that of your South African investment. You want to see a decent return on your investment over the long-term.

But when weighing up investment options, it’s important not to invest too defensively nor too aggressively. You want to strike a balance.

That’s why you need to weigh up the merits of each offshore investment properly before parting with your cash.


Investing in offshore unit trusts


For instance, you could opt to invest in offshore unit trusts.

One benefit of unit trusts is you gain instant diversification and it takes the worry out of picking individual stocks yourself.

They’re long-only funds. This means if the stock market takes a turn for the worse, your investment is likely to suffer as a consequence. But if you’re investing for the long-term, you can ride out these bumps.


An alternative offshore investment to consider


An alternative is to invest in hedge funds.

These funds focus on making a return and preserving capital. But unlike unit trusts, these funds can short shares and other instruments to preserve the fund during times of market dips.

But with the strategies hedge fund managers employ, they can be risky investments and don’t tend to be as liquid as unit trust funds. They are also not as transparent as unit trusts.

This is why it’s so important to research potential investments before investing. You need to weigh up the advantages and disadvantages of each before making a choice.

You could speak to your stock broker for some pointers and they might be able to recommend a suitable person to discuss offshore opportunities with.

So there you have it. How to get the balance right with your offshore investments.

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Getting the balance right with your offshore investments
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