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accessing global markets

While diversification across market sectors is common; diversifying across multiple asset classes is less so. Yet, modern technology has opened up the world to retail traders & investors and has provided significant opportunities for them to take advantage of global financial markets and the various opportunities that they offer.

Most of today’s brokers provide access to several thousand tradable products from all major stock, futures and currency exchanges.

While there are certain things to take into account, such as exchange rates and the way that different products are traded, diversification across multiple markets and multiple product types should not be shied away from simply because they seem unfamiliar. Investigating the benefits of new markets may just open up what is literally a world of opportunity.

Key considerations:

  • The Australian share market is comparatively small to those of other nations
  • Many familiar products and companies can be traded (Gold, Crude Oil, BHP, Google, Microsoft, Nokia)
  • 24 hour trading opportunities- easy access to global markets from a single, Australian-dollar based account
  • Some products have significantly lower trading costs than others
  • While some carry higher risk, others are lower and can even be used to protect other investments
  • Many can be traded using high leverage- increases risk and reward potential
  • The trading hours of some markets can either be a benefit or an inconvenience
  • You should always have what you consider to be sufficient understanding of what you are trading

Liquidity (the level of buying and selling activity, and their quantities) is a key point of consideration for any investor, and especially so for a trader using leverage (gearing). Trading in a highly liquid market means having a greater ability to get in and out of trades quicker and with less slippage (a term for the difference between your ordered price and your actual traded price), this can greatly improve your bottom-line profit over time.

Many overseas markets – especially currencies, index contracts (through CFDs or Futures) and the US stock market (including CFDs) – have vastly superior liquidity when compared to with the Australian share market.

In addition to their high liquidity, many traders prefer the hours of operation of some markets. For example; the UK share market opens at 5pm (Sydney time) and has many familiar stocks such as BHP and RIO, to name but a few. Furthermore, several products such as Currencies, Gold, Crude Oil and most stock market index contracts (like the Australian SPI200) can be traded through an Australian brokerage firm practically 24 hours a day. You don’t even need to worry about converting and reconverting currencies, you can have a single Australian dollar account and your broker will take care of

“The whole of science is nothing more than a refinement of everyday thinking.” – Einstein

This website is owned and operated by Investor Unity Pty Ltd (ABN: 90 160 624 331). Any advice included in this website or correspondence is general advice only and is based solely on consideration of the investment or trading merits of the financial products alone, without taking into account the investment objectives, financial situation or particular needs (i.e. financial circumstances) of any particular person. In addition to its internal services, Investor Unity is compensated by brokers and other third parties by way of referral/affiliate and/or general partnership arrangements, via its websites and other communications.

Investor Unity is genuinely interested in your long-term trading & investment success. We advise you to take all necessary steps to ensure you have a good understanding of the products & services you’re considering investing in – particularly if they involve leverage. While Investor Unity takes every care to ensure that we only deal with the highest quality services, from throughout the industry, past performance is not a guarantee of future performance. Other risks are also invloved, some of which are listed at www.iu.com.au/risk, which should be read. Before making an investment or trading decision based on the general advice, the recipient should carefully consider the appropriateness of the advice in light their financial circumstances and should carefully review the PDS of the relevant financial product as provided by your investment broker. Past results are not a guarantee of future performance. Please contact us, to discuss any questions or concerns you may have- we are here to help.

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