(4) Tax Implications
It is one of the most significant factors to look before investing in foreign stock markets. Taxes can cut the profits of an investor to a great extent. It is the reason why the rate of tax in a concerned country gains importance.
You should always find the tax implications for foreign investors in a given country. If you are investing in US stock markets then chances are that you will not be taxed for buying & selling securities.
In absence of capital gains tax, you will perhaps generate more profits per trade. However, dividends are usually taxed at 15% to 30% quite similar to that of Americans themselves.
Similarly, overseas income is not taxed in Malaysia. It will also not be declared to Inland Revenue Board of Malaysia. Thus, favorable tax implications on capital gains made from international stocks can boost your profits.
(5) International Market Hours
It is one of the most popular factors to look before investing in foreign stock markets. Different countries are known to have different time zones for various business activities. Global stock markets are not a different thing in this regard.
Stock markets in different country are found to have different timing for pre-market hours, regular trading hours, & even post-market hours. A trader or investor should have a basic knowledge about the regular trading hours of a foreign stock market.
Generally, you can enter a global order at any time. But, orders are executed only during regular market hours of the local stock exchange. You can also get real-time quotes only during regular local market hours.
However, all global orders that are unfilled at the end of the market session will automatically be cancelled. Thus, investors or traders should definitely match their local time zone with that of foreign stock markets. It will help you to analyze your suitability for a given market.
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