The secret is investing in ADRs, American Depository Receipts. ADRs which stands for American Depository Receipts trade just like regular stocks but represent the ownership of shares of a foreign company trading on U.S. financial markets. Buying shares of companies in other countries can be very complicated and very risky not to mention they trade at different prices and currency levels that is why Investing in ADRs are great .
During the terrible financial crisis of 2008, when major stock markets were crashing around the world, surprisingly ADRs, American Depository Receipts still performed nicely and earned some nice gains.
It is important before investing in an ADRs,American Depository Receipts of a particular country to look at the financial stability of that country. For example, how has the stock market of that country been performing lately, has it been in an uptrend, or downtrend? Sometimes strong global demand for natural resources drive a countrys stock market up, and its ADRs go up as well.
Why Trade ADRs-
American Depository Receipts?
ADR which stands for American Depository Receipt, trades just like a regular stock but represents the ownership of shares of a foreign company trading on U.S. financial markets. Not all foreign companies have ADR's, but those that do trade on US exchanges and in dollars. Buying shares of companies in other countries can be very complicated and very risky not to mention they trade at different prices and currency levels. That is why ADRs are great! They are an easy and convenient way for an individual trader or investor to buy shares in a foreign company without the high risk of buying these company's stock in other countries. Each ADR is issued by a US depository bank and can represent a fraction of a share, a single share, or multiple shares of foreign stock. The price of an ADR is often close to the price of the foreign stock in its home market, adjusted for the ratio of ADR to foreign company shares.
What is an ADR
(American Depository Receipt)?
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