Did you know that not once in the last 27 years has the US produced the highest return of any world market?
Not once.
In fact, from 2002-2006, the US finished 23rd out of 25 world markets, despite returning over 60%. You would have made ten times more money by investing abroad.
That same case can be made today. Despite an extremely volatile 2008 so far, the US market is only 10% off its all-time high. In contrast, many emerging markets? most notably China and India? have fallen as much as 50% from their recent peaks.
And while the US economy is already in a recession, many international markets? Brazil, China, Mexico, etc? continue to plow along just fine.
Simply put: the biggest growth and value stories today lie outside US borders. And you can take advantage of them without sending a cent of your money overseas.
Just use American Depository Receipts (ADRs).
ADRs are shares offered by US banks in place of actual shares in an international company. Here's how they work...
A US bank like JP Morgan buys shares in an international company. The bank then issues ADRs linked to these shares to US investors.
So you get international exposure without sending your money overseas. And because ADRs are traded in the US, you don't have to pay foreign taxes on the capital gains or dividends. Additionally, you don't need to worry about converting your dollars to some other currency: both ADRs and their dividends are paid in dollars.
Simply put, ADRs are a safe and simple means for U.S. investors to invest in overseas stocks easily.
There are three levels of ADRs:
Level 1: These are ADRs in which the foreign company doesn't qualify or doesn't want to be listed on a U.S. exchange. Consequently, the company trades over the counter. These types of ADRs have the loosest requirements from the SEC. Their stock symbols end with a "y".
Level 2 ADRs: These ADRs trade on U.S. exchanges, have stricter SEC regulations, and consequently get more trading volume.
Level 3 ADRs: the crme de la crme. These ADRs are created when an international company stages a public offering of ADRs in the US. These ADRs have the strictest SEC regulations of the three.
Truthfully, all three levels are safe. Most foreign markets have accounting principles equal to if not better than the US? after all, the credit crisis did start here.
And while international investing has only grown popular in the last seven years, ADRs have been around since 1927? Almost as long as mutual funds. They're safe, trade on US exchanges, and free from foreign taxes.
Best of all, you don't need to set up a foreign account.
Best Regards,
Graham Summers
http://www.gpscapitalresearch.com
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