Investing in International Shares: A Beginner’s Guide to Global Markets

Investing in international shares opens your portfolio to the rest of the world: global brands, fast‑growing economies, and industries that may not exist locally. For beginners, it can feel intimidating, but with a clear framework and sensible steps, investing in international shares becomes a practical way to diversify and grow wealth over the long term.

Why consider investing in international shares?

Investing in international shares helps you reduce dependence on your home market and tap into global growth. No single country dominates every sector. Technology, healthcare, consumer brands, industrials and emerging market companies all offer different opportunities.

By investing in international shares, you can:

• Access companies and sectors not available on your local exchange.
• Reduce country‑specific risk, such as local economic downturns or regulatory changes.
• Potentially benefit from growth in economies with different cycles and demographics.

Instead of relying solely on domestic shares, you spread your investments across regions, industries and currencies. For many investors, this is a key part of building a resilient, long‑term portfolio.

Understand the basics before you go global

Before investing in international shares, it is important to be comfortable with core investing concepts:

• Risk versus return: higher potential returns usually come with higher volatility.
• Diversification: spreading investments across assets and markets to reduce risk.
• Time horizon: how long you can leave money invested without needing it.
• Costs: brokerage, currency conversion, fund fees and taxes.

If you are new to investing, it may be wise to start with basic share investing guides or domestic markets first, then extend those skills to international shares. The fundamental principles remain the same; only the context changes.

Ways to invest in international shares

There are several practical ways to start investing in international shares:

• Direct shares via an international or multi‑market broker: you open a trading account that allows you to buy shares listed on overseas exchanges (such as the US, UK or Asia).
• Exchange‑traded funds (ETFs): you invest in funds listed on your local exchange that track international indices or sectors, providing instant diversification across many companies.
• Managed funds: you invest in actively managed funds where professional managers select and manage international shares on your behalf.

For beginners, ETFs and managed funds are often the easiest entry point. They reduce the need to research individual companies and provide broad exposure with a single investment, while still giving you access to international markets.

Key risks in investing in international shares

Investing in international shares introduces some additional risks beyond those in domestic markets:

• Currency risk: your returns are affected by exchange rate movements between your home currency and the currency of the investment. If the foreign currency falls relative to your own, it can reduce your returns even if the share price rises.
• Regulatory and legal differences: investor protections, disclosure rules and market structures can vary between countries. It is important to understand basic protections in the markets you invest in.
• Political and economic risk: changes in government policy, trade relationships, or economic conditions can affect international shares in ways that differ from domestic stocks.

Managing these risks involves diversification across countries and sectors, using broad funds, and avoiding over‑concentration in any single foreign market.

Researching international markets and companies

Even if you use ETFs or managed funds, it is helpful to understand the markets you are investing in. When researching investing in international shares, consider:

• Which regions you want exposure to (for example, US large caps, European markets, Asian growth, or global emerging markets).
• The sectors that appeal to you – technology, healthcare, consumer goods, infrastructure, or others.
• The index or benchmark a fund tracks, if you use ETFs, to see what companies and countries you are actually investing in.

For direct investing in individual international shares, you would also look at company fundamentals: revenue, earnings, debt, competitive position, and the broader macro context. As a beginner, keeping this simple and focusing on well‑known, transparent companies or broad funds can reduce complexity.

Practical steps to start investing in international shares

To get started in investing in international shares:

1. Clarify your goals and risk tolerance. Are you seeking long‑term growth, diversification, or specific sector exposure?
2. Decide how much of your portfolio you want to allocate to international shares. This might be a modest percentage at first, increasing as you become more comfortable.
3. Choose your investment vehicle: direct shares, ETFs, or managed funds. For most beginners, international ETFs are a straightforward starting point.
4. Open or use a brokerage or platform that provides access to international markets or global funds.
5. Make your first investment in line with your plan, and be prepared to hold it for the long term rather than reacting to short‑term market moves.

Keeping contributions regular – for example, monthly or quarterly investments – can help smooth the impact of market volatility and currency fluctuations over time.

Keeping a long‑term perspective

Investing in international shares is best approached with a long‑term perspective. Global markets can be volatile and currency movements unpredictable. Trying to time foreign markets or chase short‑term trends is difficult even for professionals.

Instead, think in terms of years and decades. Global companies and markets evolve, and diversification across international shares gives you exposure to that evolution. Reviewing your portfolio periodically – perhaps once or twice a year – to rebalance and ensure your international allocation still matches your goals is often more effective than frequent trading.

If you combine solid basic investing skills with a clear plan for using international shares, you can build a portfolio that benefits from growth beyond your home market while managing the additional risks.

References

Westpac. Investing in international shares.
HSBC Australia. Investing in international shares.