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Three steps to help you make the best offshore investments

by , 06 October 2014

Investing offshore is a great way to diversify your portfolio.

Financial markets in other countries may perform differently to those in South Africa. And you can also invest in sectors that aren't available in South Africa, such as utilities.

So when it comes to offshore investments, what do you need to consider?

Let's take a closer look…


How to give your offshore investments the best chance of success


Investing offshore is really no different to investing in South Africa. You have to do your research.

Here are some key steps to follow…


Investing offshore step #1: Have a long-term investment window


As with your South African investments, your offshore investments have the best chance of performing well over a longer period of time.

So when looking at different options, you need to look at the three-, five- and ten-year performance records. This will give you a truer picture of how the product reacted depending on what the stock market was doing.

By investing for the long-term, you increase the chance of making money and reduce the chance of losing money.


Investing offshore step #2: Make sure you diversify your overseas portfolio


Investing offshore follows the same principles as your domestic investment portfolio. You need to spread your investments.

For example, you need to invest in different financial instruments, such as shares and bonds.

You also need to spread you investments across different sectors, industries, companies and regions.


Investing offshore step #3: Make sure your asset allocation matches your financial goals


Your asset allocation should reflect your financial goals.

For instance, if you’re saving for a long-term goal, such as paying your child’s varsity education or for retirement, short-term volatility in the stock market shouldn’t be too much of a worry.

But if you’re goal is more short-term, such as saving a deposit for a house, you should think about holding some of your portfolio in bonds or cash.

So there you have it, three steps to help you make the best offshore investments.

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Three steps to help you make the best offshore investments
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