Georgetown Trust Blog

Ways to Diversify Your Offshore Investments

Posted by Georgetown Trust on Dec 16, 2014 1:37:00 PM

investing-offshoreCreating and sustaining a viable portfolio of offshore investments involves a little more than finding one type of opportunity and buying heavily into that one type of option. Just as with domestic investing, diversification is important if you want to continue growing wealth in any economic situation.

When it comes to diversifying your offshore investments, there are several different approaches that are worth considering.

Include at Least Three Different Types of Investments

One of the easiest ways to make sure your offshore investing is diversified is to intentionally acquire holdings that are very different from one another. The general idea is to choose several investments that are likely to hold up well in most economic situations.

As part of the evaluation of each opportunity, make sure you understand if the investment should be held for a short period of time or if the holding would be worth keeping for an extended amount of time.

A simple example would be to include more or less equal investments in real estate, stocks and various types of bond issues. This kind of mix would make it relatively easy to continue growing the portfolio even if one of the investment types was currently stagnant or undergoing a temporary downturn in the marketplace.

In theory, the other two would generate enough returns to offset the momentarily low performance of the third and maybe even most an overall net gain with the portfolio.

Stock Options From Multiple Industries

Just because you prefer to focus on stock options, that does not mean you can’t insulate yourself by choosing options associated with a variety of industries. With this approach, your goal is to balance the options so that you have connections with several different industry types.

Ideally, those industries will not have any direct relation to one another and are less likely to be affected by the same set of economic shifts.

For example, you may want to consider including some manufacturing stocks in the portfolio along with shares issued by software companies. Toss in some shares issued by a couple of telecommunication companies and you have a combination that is likely to serve you very well in most situations.

As long as the choices are varied enough so that adverse circumstances in the market won’t cause all three to lose money at the same time, you can consider the combination a good fit for your portfolio.

Acquire Holdings Based in Different Countries

There is no rule that says you must focus on offshore investments based in a single nation. You certainly have the opportunity to identify several different countries that are enjoying favorable economic conditions and investigate the investment opportunities associated with each one.

You may find that a mix that includes buying into Belize mortgages, picking up some stocks from the Far East and possibly investing in some bond issues associated with an African nation may be exactly what works for your needs.

The trick is to carefully consider the pros and cons of doing business in each of the nations under consideration, then find investments that you believe are highly likely to produce returns that are in line with your financial goals.

Finding the Mix That is Right for You

Keep in mind there is no golden combination that is ideal for every investor. It is your responsibility to determine what you want to achieve with your offshore investments and then decide what strategy or combination of strategies is likely to produce the desired result.

Take your time and look closely at every opportunity and see how it would fit in with your overall goals in the short-term and the long-term.

Doing so will make it much easier to identify a favorable trend, ride that trend until it begins to level off and then replace the holding with something that shows promise of yielding excellent returns in the future.

Contact Georgetown Trust

Topics: Banking Services