Dividends4Life: Dividend Stocks With Profitable Returns

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Dividend Stocks With Profitable Returns

Posted by D4L | Saturday, February 19, 2011 | | 0 comments »

One of the best ways to invest in foreign markets is through American Depository Receipts ADRs. ADRs provide convenience in terms of trading and reporting of those trades to the IRS. The transaction costs are also much lower than they’d be when buying through local exchanges. You don’t have to worry about the huge spread most banks charge when converting U.S. dollars to the stocks’ local currency. These benefits are visible when trading in emerging markets’ stocks.

Insider Monkey likes investing in emerging markets for three reasons. First, they are usually cheaper than are U.S. stocks based on current P/E ratios. Second, their GDPs grow faster. Third, their currencies are usually undervalued, and they will eventually catch up with the U.S. dollar. For short term investors, emerging markets may be very volatile and losses will be exaggerated during market declines. However, long term investors with diversified portfolios can protect themselves from dollar inflation and benefit from emerging markets’ higher growth rates.

Source: Wall St Cheat Sheet

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