Investing abroad in foreign markets should be considered a must for South African’s. The main reason for this is the on-going depreciation of the rand against the major foreign currencies. The other significant reason is that you cannot get a full diversification of your investments by investing in South Africa alone. By investing offshore you increase your chances of getting better returns at a lower risk than you will get by keeping all your investments tied up here. There are a lot of other reasons, which we will be covering over time on this website, why you should invest offshore.
Arguments that South African’s are being unpatriotic by investing abroad have no foundation. The money is not lost to South Africa. Money invested offshore will, in the vast majority of instances, earn returns that will flow back into South Africa. Neither is the capital lost to South Africa.
The same applies to companies that invest abroad. If the majority of shareholders are in South Africa, there will be long-term benefits for the country as a whole as profits move back to local shareholders.
Many people believe that they need a sizeable amount of money to invest in foreign markets. This is not the case. You can invest as little as R200 a month in a local unit trust fund or life assurance endowment policy that invests the savings of investors in foreign countries. The investment options open to you however increase rapidly when you have larger sums of money to invest. The issue is to know which foreign investments are best for the amount of money you have available.