How to start investing in overseas shares
INVESTOR Roger Qian’s desire to own a slice of well-known overseas companies resulted in him taking the leap and dabbling in US stocks.
But the 31-year-old IT product manager said he would only purchase big businesses whose products he had used himself or he had knowledge about.
“Uber, Slack and Beyond Meat were companies I knew or believed would gain in popularity in the future,” Mr Qian said.
Mr Qian is one of 50,000 Australians who has used Sydneybased US equities broker Stake to invest overseas.
This allows investors to buy into companies including Amazon, Netflix, Telsa and Uber online or using a smartphone app.
Mr Qian said he wanted to find an easy and cost-effective way to invest internationally and he has tipped in more than $20,000 in the past year.
“I invest in the companies I love and I might revisit my portfolio every quarter to see if I should buy or sell,” he said.
Stake co-founder Dan Silver said many investors using its platform already held shares on the Australian Securities Exchange and wanted to expand their share portfolios globally.
“About 77 per cent of our customers already have a local Australian trading account while three quarters have never traded US shares before,” he said. “So they inherently need less education and are comfortable navigating around a brokerage platform.”
Stake charges customers a foreign exchange fee for converting Australian to US dollars of $US7 for every $A1000 trade.
Robo advice platform InvestSMART’s chief market strategist, Evan Lucas, said it had never been easier to invest overseas.
“Whatever company it is, whether it’s Australia, the US or Europe you should do some due diligence,” he said.
Mr Lucas said Australians also needed to be aware they had to fill out a W-8BEN form at the time of purchase. “You have to complete it before you have any ability to transact on the New York Stock Exchange,” he said.
He also suggested people unsure about which US stocks to buy could consider investing in exchangetraded funds that took a slice of multiple US companies.
These can be purchased on the ASX in Australian dollars, and the tax implications are handled in Australia, not overseas.
COST-EFFECTIVE: Roger Qian has been expanding his portfolio of shares, investing in companies he is familiar with or uses, whether they are in Australia or overseas. Picture: Image/Monique Harmer