Georgie Engelbrecht

I have often spoken about how important it is to ensure that all your proverbial investment eggs aren’t kept in one basket. As such we have been exploring different avenues of how to grow your money. Most of these have been based in our own back yard, with the exception of keeping our wine investments overseas of course. As I prepare to head for foreign shores though, my mind has done its usual finance nerd thing and looked at the opportunity in terms of investing.

We live in a world where foreign shores are merely a matter of location, for technology has allowed us to be active participants in markets across the globe. I have spoken before of how you can trade international indices in our humble rand from the comfort of your own home via ever-advancing online trading platforms, but what if you want to take this one step further? What if you actually want to trade international companies with foreign currency? Well, then it is your lucky day because technology has made that possible too!

Going global

As with investing as a whole there are many ways to go about this. We have discussed how holding unit trusts can get you exposure into foreign markets, as can buying foreign bonds or ETFs. But what I am looking at this week is having access to buy and sell actual shares in foreign companies.

Lets be honest, we all know what is going on in the rest of the world, what with the access DSTV gives to foreign news stations, I reckon more South Africans interested in investing watch Sky News, CNN and Bloomberg whilst they eat their breakfast than those who keep it local. The world is so small and everyone has an opinion so why not trade that opinion? Nothing like putting your money where your mouth is. Imagine you had been short BP two years ago before the oil spill or that you could have a little bit of defensive Johnson & Johnson exposure in your portfolio.

There are a few online trading platforms locally that will give you access to international shares however the number of shares will be limited. The best option would be to open up an account in the country where the stocks have their primary listings. This is however, easier said than done as you will require foreign currency to do so but it all falls into the strategy of not having all your eggs in one basket.

Having an overseas trading account is a means of taking some cash offshore. The SARB allows each adult SA citizen to invest up to a maximum of R5m offshore per annum. Tax clearance will need to be given from Sars first, once received the funds can then be transferred abroad. Be mindful of the tax implications of receiving dividends abroad too but as we’ve said, investing abroad is a strategic decision and the tax factor shouldn’t be a deal-breaker.

Once all your ducks are in a row and your eggs in different overseas baskets, you’re good to trade and it’s as easy as turning on your computer. Oh and managing to call the trades correctly of course.