Tuesday, 19 March 2019

Planning to diversify my portfolio to overseas stocks

I have actually been thinking about diversifying my portfolio and I first wanted to get into buying US stocks.

However I realized that the process is a little more complicated and a higher capital would be preferred so I decided to find if there are other alternatives.

I found that we can invest in Hong Kong markets with no withholding tax rate on dividends unlike US where there is a 30% withholding tax on dividends.

So I would be starting with getting into the HK market first but first, I would need to figure out what brokerage firm I would be using as I don't think I would use DBS Vickers (which I use for my SG stocks) to purchase HK stocks, not too sure about it.

If I were to continue and use DBS Vickers as well, the charges would be as follows

and there would also be a 1% of net dividend with the minimum being HKD 30 and maximum being HKD 300.

Also, there will be a custody fee of $2 per month if I do not satisfy the waiver conditions based on a combination of Singapore and foreign market transactions where:

    (a) 2 x transactions per month are done
    (b) 6 x transactions per quarter are done


I have also heard a lot about interactive brokers especially if you are investing in US stocks.

However, one thing is that it is only worth it if you have an account that is greater than USD100 000 in average equity for a calendar month or 10 USD in commissions generated in a calendar month if not, you would need to pay the account maintenance fees.

Which I am not able to achieve yet in the coming years. So for now, before going into the HK market or even the US market, I think I would be building up my cash first though I hope to enter as soon as I can.

If you have any suggestions or feedback for me, do comment below! Thanks.