vania-janet/multiturn-rag-retrieval-data huggingface dataset:
ETFs may have lower costs than traditional mutual funds, so keep ETFs in mind when selecting the mutual funds in which to invest. For international diversification, do not forget emerging markets. It is not excessive to invest e.g. 20% to emerging markets. Emerging markets have a higher risk but they also have a higher return. A portfolio that does not include emerging markets is not in my opinion well diversified. When getting close to retirement age, I would consider increasing the percentage of bonds in the portfolio. This should be done primarily by putting additional money to bonds instead of selling existing investments to avoid additional taxes (not sure if this applies to other taxation systems than the Finnish one). Bond investments are best made though low-cost mutual funds as well. Keep bond investments in your local currency and risk-free assets (i.e. select US government bonds). Whatever you do, remember that historical return is no guarantee of future return. Actually, the opposite may be true: there is a mean reversion law. If a particular investment has returned well in the past, it often means its price has gone up, making it more likely that the price goes down in the future. So don't select a fund based on its historical return; instead, select a fund based on low costs. However, I'm 99% certain that over a period of 40 years, stocks will return better than other investments. In addition to fund costs, taxes are the other certain thing that will be deducted from your returns. Research what options you have to reduce the taxes you need to pay. 401-K was explained in another answer; this may be a good option. Some things recommended in other answers that I would avoid:
"As user quid states in his answer, all you need to do is open an account with a stock broker in order to gain access to the world's stock markets. If you are currently banking with one of the six big bank, then they will offer stockbroking services. You can shop around for the best commission rates. If you wish to manage your own investments, then you will open a ""self-directed"" account. You can shelter your investments from all taxation by opening a TFSA account with your stock broker. Currently, you can add $5,500 per year to your TFSA. Unused allowances from previous years can still be used. Thus, if you have not yet made any TFSA contributions, you can add upto $46,500 to your TFSA and enjoy the benefits of tax free investing. Investing in what you are calling ""unmanaged index funds"" means investing in ETFs (Exchange Traded Funds). Once you have opened your account you can invest in any ETFs traded on the stock markets accessible through your stock broker. Buying shares on foreign markets may carry higher commission rates, but for the US markets commissions are generally the same as they are for Canadian markets. However, in the case of buying foreign shares you will carry the extra cost and risk of selling Canadian dollars and buying foreign currency. There are also issues to do with foreign withholding taxes when you trade foreign shares directly. In the case of the US, you will also need to register with the US tax authorities. Foreign withholding taxes payable are generally treated as a tax credit with respect to Canadian taxation, so you will not be double taxed. In today's market, for most investors there is generally no need to invest directly in foreign market indices since you can do so indirectly on the Toronto stock market. The large Canadian ETF providers offer a wide range of US, European, Asian, and Global ETFs as well as Canadian ETFs. For example, you can track all of the major US indices by trading in Toronto in Canadian dollars. The S&P500, the Dow Jones, and the NASDAQ100 are offered in both ""currency hedged"" and ""unhedged"" forms.
"Yes, so what I'm saying is that the balance of $9 left over from your trade surplus, no matter how you invest it in the U.S., even in treasuries or simply as a bank deposit technically counts as an ""investment"" right?"
There are some ETF's on the Indian market that invest in broad indexes in other countries Here's an article discussing this  Be aware that such investments carry an additional risk you do not have when investing in your local market, which is 'currency risk'  If for example you invest in a ETF that represents the US S&P500 index, and the US dollar weakens relative to the indian rupee, you could see the value if your investment in the US market go down, even if the index itself is 'up' (but not as much as the change in currency values). A lot of investment advisors recommend that you have at least 75% of your investments in things which are denominated in your local currency (well technically, the same currency as your liabilities), and no more than 25% invested internationally.  In large part the reason for this advice is to reduce your exposure to currency risk.
I'm surprised nobody else has suggested this yet: before you start investing in stocks or bonds, buy a house. Not just any house, but the house you want to live in 20 years from now, in a place where you want to live 20 years from now - but you also have to be savvy about which part of the country or world you buy in. I'm also assuming that you are in the USA, although my suggestion tends to apply equally anywhere in the world. Why? Simple: as long as you own a house, you won't ever have to pay rent (you do have to pay taxes and maintenance, of course). You have a guaranteed return on investment, and the best part is: because it's not money you earn but money you don't have to spend, it's tax free. Even if the house loses value over time, you still come out ahead. And if you live abroad temporarily, you can rent out the house and add the rent to your savings (although that does make various things more complicated). You only asked for options, so that is mine. I'll add some caveats. OK, now here are the caveats:
"If you owned a bank how would you invest the bank's money?  Typically banks are involved in loaning out money to businesses, people, and government at a higher interest rate then what they are paying to depositors.  This is the spread and how they make money. If the bank determines that the yields on government bonds is more attractive then loaning the money out to businesses and people then the bank will purchase government bonds.  It can also decide the other way.  In this manner the mortgage and bond markets are always competing for capital and tend to offer very similar yields. Certain banks have the unique privilege of being able to borrow money from the FED at the Federal Funds rate and use this money to purchase government debt or loan it out to other banks or purchase other debt products. In this manner you see a high correlation between the FED funds rate, mortgage rates, and treasury yields.    Other political factors include legislation that encourages mortgage lending (see Community Reinvestment Act) where banks may not have made the loans without said legislation. In short, keep your eye on the FED and ask yourself: ""Does the FED want rates to rise?"" and ""Can the US government afford rising rates?""  The answer to these two questions is no.  However, the FED may be pressured to ""stop the presses"" if inflation becomes unwieldy and the FED actually starts to care about food and energy prices.  So far this hasn't been the case."
The reason for these low interests is that the Japanese central bank is giving away money at negative interests to banks. Yes, negative. So, short of opening your own bank, you'll have to either choose less liquid investments or more risky ones. Get Japanese government bonds. Not a great interest, band not that liquid, but for a 5 years bond you'll do better than the bank can. Get Japanese corporate bonds. Still not great, and a bit more risky, it's better than nothing. Get a Japanese mutual fund. I can't recommend any though. Buy Japanese stock. Many Japanese stock have interesting kickbacks. For example if you buy enough stock of Book-Off you'll get some free books every month. it's risky though because I believe the next NIKKEI index crash is imminent.
What explains the most of the future returns of a portfolio is the allocation between asset classes. In the long term, stock investments are almost certain to return more than any other kinds of investments. For 40+ years, I would choose a portfolio of 100% stocks. How to construct the portfolio, then? Diversification is the key. You should diversify in time (don't put a large sum of money into your stock portfolio immediately; if you have a large sum to invest, spread it around several years). You should diversify based on company size (invest in both large and small companies). You should also diversify internationally (don't invest in just US companies). If you prefer to pick individual stocks, 20 very carefully selected stocks may provide enough diversification if you keep diversification in mind during stock picking. However, careful stock picking cannot be expected to yield excess returns, and if you pick stocks manually, you need to rebalance your portfolio occasionally. Thus, if you're lazy, I would recommend a mutual fund, or many mutual funds if you have difficulty finding a low-cost one that is internationally diversified. The most important consideration is the cost. You cannot expect careful fund selection to yield excess returns before expenses. However, the expenses are certain costs, so prefer low-cost funds. Almost always this means picking index funds. Avoid funds that have a small number of stocks, because they typically invest only in the largest companies, which means you fail to get diversification in company size. So, instead of Euro STOXX 50, select STOXX 600 when investing to the European market. ETFs may have lower costs than traditional mutual funds, so keep ETFs in mind when selecting the mutual funds in which to invest. For international diversification, do not forget emerging markets. It is not excessive to invest e.g. 20% to emerging markets. Emerging markets have a higher risk but they also have a higher return. A portfolio that does not include emerging markets is not in my opinion well diversified. When getting close to retirement age, I would consider increasing the percentage of bonds in the portfolio.
Although not technically an answer to your question, I want to address why this is generally a bad idea.   People normally put money into a savings account so that they can have quick access to it if needed, and because it is safe.  You lose both of these advantages with a foreign account.  You are looking at extra time and fees to receive access to the money in those australian accounts.  And, more importantly, you are taking on substantial FX risk.  Since 2000 the AUD exchange rate has gone from a low of 0.4845 to a high of 1.0972.  Those swings are almost as large as the swings of the S&P.  But, you're only getting an average return of 3.5%, instead of the average return people expect with stocks of 10%. A better idea would be to talk to a financial adviser who can help you find an investment that meets your risk tolerance, but gives you a better return than your savings account. On a final thought, the exception to this would be if you plan on spending significant time in Australia.  Having money in a savings account there would actually allow you to mitigate some of your FX risk by allowing you to decide whether to convert USD when you are travelling, or using the money that you already have in your foreign account.
"Excellent question, though any why question can be challenging to answer because it depends on the financial products in question.  At least, I haven't seen many target date retirement funds that include a high percent of foreign stocks, so below explains the ones I've seen which are primarily US stocks. The United States (before the last twenty years) has been seen as a country of stability.  This is not true anymore, and it's difficult for my generation to understand because we grew up in the U.S.A being challenged (and tend to think that China and India have always been powers), but when we read investors, like Benjamin Graham (who had significant influence with Warren Buffett), we can see this bias - the U.S.A to them is stable, and other countries are ""risky.""  Again, with the national debt and the political game in our current time, it does not feel this way.  But that bias is often reflect in financial instruments. The US Dollar is still the reserve currency, though it's influence is declining and I would expect it to decline.  Contrary to my view (because I could be wrong here) is Mish, who argues that no one wants to have the reserve currency because having a reserve currency brings disadvantages (see here: Bogus Threats to US Reserve Currency Status: No Country Really Wants It!; I present this to show that my view could be wrong). Finally, there tends to be the ""go with what you know.""  Many of these funds are managed by U.S. citizens, so they tend to have a U.S. bias and feel more comfortable investing their money ""at home"" (in fact a famous mutual fund manager, Peter Lynch, had a similar mentality - buy the company behind the stock and what company do we tend to know best?  The ones around us.). One final note, I'm not saying this mentality is correct, just what the attitude is like.  I think you may find that younger mutual fund managers tend to include more foreign stocks, as they've seen that different world."
No, it's not a good idea. You started by saying you'd like to invest, but then mentioned something that's not an investment, it's a speculation. Both Forex and CFDs are not really investments. They are a zero sum game where over time, it's a pool of your money, the other trader's money, and the broker, redistributed over time.  If you truly wish to invest, you'll read up on the process, understand your own long term goals, and put aside X% (say 5-15) of your monthly income. You should look into investments that are long term, and will fund your retirement 30-40 years hence.
Currency futures are another popular hedge; a company in international business will often trade options on the currencies of the companies it does business in, to limit the ""jitters"" seen in the FOREX spot market caused by speculation and other transient changes in market demand. Diversification, by contrast, is about choosing multiple unrelated investments, the idea being to limit losses due to a localized change in the market. Companies' stocks gain and lose value every day, and those companies can also go out of business without bringing the entire economy to its knees. By spreading your wealth among investments in multiple industries and companies of various sizes and global locations, you insulate yourself against the risk that any one of them will fail. If, tomorrow, Kroger grocery stores went bankrupt and shuttered all its stores, people in the regions it serves might be inconvenienced, but the market as a whole will move on. You, however, would have lost everything if you'd bet your retirement on that one stock. Nobody does that in the real world; instead, you put some of your money in Kroger, some in Microsoft, some in Home Depot, some in ALCOA, some in PG&E, etc etc. By investing in stocks that would be more or less unaffected by a downturn in another, if Kroger went bankrupt tomorrow you would still have, say, 95% of your investment next egg still alive, well and continuing to pay you dividends. The flip side is that if tomorrow, Kroger announced an exclusive deal with the Girl Scouts to sell their cookies, making them the only place in the country you can get them, you would miss out on the full possible amount of gains you'd get from the price spike if you had bet everything on Kroger. Hindsight's always 20/20; I could have spent some beer money to buy Bitcoins when they were changing hands for pennies apiece, and I'd be a multi-millionaire right now. You can't think that way when investing, because it's ""survivor bias""; you see the successes topping the index charts, not the failures. You could just as easily have invested in any of the hundreds of Internet startups that don't last a year."
So far we have a case for yes and no.  I believe the correct answer is... maybe. You mention that most of your expenses are in dollars which is definitely correct, but there is an important complication that I will try to simplify greatly here.  Many of the goods you buy are priced on the international market (a good example is oil) or are made from combinations of these goods.  When the dollar is strong the price of oil is low but when the dollar is weak the price of oil is high. However, when you buy stuff like services (think a back massage) then you pay the person in dollars and the person you are paying just wants dollars so the strength of the dollar doesn't really matter. Most people's expenses are a mix of things that are priced internationally and locally with a bias toward local expenses.  If they also have a mix of investments some of which are international and depend on the strength of the dollar and some are domestic and do not, then they don't have to worry much about the strength/weakness of the dollar later when they sell their investments and buy what they want.  If the dollar is weak than the international goods will be more expensive, but at the same time international part of their portfolio will be worth more. If you plan on retiring in a different country or have 100% of your investments in emerging market stocks than it is worth thinking about either currency hedging or changing your investment mix.  However, for many people a good mix of domestic and international investments covers much of the risk that their currency will weaken while offering the benefits of diversification.  The best part is you don't need to guess if the dollar will get stronger or weaker. tl;dr: If you want your portfolio to not depend on currency moves then hedge.  If you want your retirement to not depend on currency moves then have a good mix of local and unhedged international investments.
Usually, you can buy ETFs through brokerages.  I looked at London to see if there's any familiar brokerage names, and it appears that the address below is to Fidelity Investments Worldwide and their site indicates that you can buy securities. Any brokerage, in theory, should allow you to invest in securities.  You could always call and ask if they allow you to invest in ETFs.  Some brokerages may also allow you to purchase securities in other countries; for instance, some of the firms in the U.S. allow investors to invest in the ETF HK:2801, which is not a U.S. ETF.  Many countries have ETF securities available to local and foreign investors.  This site appears to help point people to brokers in London. Also, see this answer on this site (a UK investor who's invested in the U.S. through Barclays).
They will buy your bond back from you cheaper than what they could turn around and sell it to somebody else for. That's why they don't charge an explicit commission... it's built in and hidden! Anyway, when I finally discovered my broker would seldom actually offer me the ""market value"" quoted for my bonds (typically, it would be bought back for a few percent less than it were theoretically worth), I gave up. I don't think bonds simply are liquid enough, nor the costs transparent enough for retail investors. (Or maybe it's just me :-) However, I do think bonds remain an important part of a diversified portfolio: Bonds ought to be represented in a diversified portfolio using low-cost bond index mutual funds or exchange-traded funds. Since these funds buy & sell bonds in large quantities, they get a better deal on the spreads. So, while you do pay an explicit management fee for a fund, you are probably saving since you're not getting shafted on the spreads."
It's a tax shelter. Foreign affiliates hold most of Microsoft's cash and investments. The cost of borrowing is much cheaper than repatriating the money and paying taxes. Those bonds are selling at rates similar to US Treasury Debt. Also, many people and organizations with lots of assets still borrow money for day to day expenses. Why? You tend to make a better return on investments which are committed for a number of years, and the timing of income from those investments may not coincide with your expenses.
"This sounds like a FATCA issue.  I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US.  The US government asserts the principle of universal tax jurisdiction over its citizens.  The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened.  Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors.  This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step.  Such a step would require thought and planning.  Note that there would be an expatriation tax (""exit tax"") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access.  A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons.  But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible.  Non-foreign entities do not have foreign obligations under FATCA."
The default of the country will affect the country obligations and what's tied to it. If you have treasury bonds, for example - they'll get hit. If you have cash currency - it will get hit. If you're invested in the stock market, however, it may plunge, but will recover, and in the long run you won't get hit. If you're invested in foreign countries (through foreign currency or foreign stocks that you hold), then the default of your local government may have less affect there, if at all. What you should not, in my humble opinion, be doing is digging holes in the ground or probably not exchange all your cash for gold (although it is considered  a safe anchor in case of monetary crisis, so may be worth considering some diversifying your portfolio with some gold). Splitting between banks might not make any difference at all because the value won't change, unless you think that one of the banks will fail (then just close the account there). The bottom line is that the key is diversifying, and you don't have to be a seasoned investor for that. I'm sure there are mutual funds in Greece, just pick several different funds (from several different companies) that provide diversified investment, and put your money there.
"The recommendations you read were, very probably, talking about US listed funds in US dollars. The mexican Bolsa de Valores says that they list over 600 mutual funds  so ""Yes"" you can invest in Mexico using Pesos if that is what you want.  You need a Corredor de Bolsa or mexico broker. Here they are.  Most international investors use exchange traded funds ETF because theirs fees are cheaper than mutual funds.  The ETF are mostly listed and traded in us stock exchange. Here they are. US mutual funds are in dollars and, because you are living in Mexico, you will have a currency risk and probably taxes.  Mexico mutual funds in Pesos do not carry any currency exposure unless the companies involved do business in the United States. You have to think about your currency exposure. B. Veo"