- Investing in international stocks is a great way of portfolio diversification.
- Investors need to be aware about the economic conditions of the markets where they are investing, as it would impact their overall returns.
- An interest rate hike is anticipated in the US in March, which has already impacted the high-growth Nasdaq stocks.
Stock markets have overall performed decently in 2021 despite the turbulence created by the pandemic. Investing in international stocks can diversify your portfolio and give you much desired returns. Thus, allotting a certain fraction of your investment portfolio to stocks in the international markets helps in maximisation of returns.
However, investors need to be aware about the economic conditions of the markets where they are investing, as it would impact their overall returns. For the UK investors looking for stocks in the US markets right now, the situation might not be as favourable with the soaring inflation pushing the Fed to raise the interest rates in the near future, probably in March as per a recent Reuters report.
The US Treasury yield has been rising in 2021, and on 20 January 2022, the 10-year yield rose up to 1.83% from 1.51% at the end of 2021. This figure could easily go up to 2% with the interest rate hike. This has hit the high growth Nasdaq stocks as their value falls by discounting their future earnings and cash flows with interest rates going up.
Even though bond yields may continue to rise, and the US market may remain volatile, some growth stocks with current good earnings and cash flows may be worth buying right now. Here are 3 stocks listed on the US markets that you can buy now to diversify your portfolio for maximum returns.
RELATED READ: Will RBA follow the US Fed & hike rates?
© 2022 Kalkine Media®
Microsoft Corporation (NASDAQ: MSFT)
American tech giant Microsoft Corporation offers personal computers, computer software, and consumer electronics across the globe. Microsoft shares have surged 50% in 2021. The stock may fall if the bond yield continues to go up, but it may be a good investment in the long run as the world is becoming digital. Microsoft shares closed at US$301.60 on 20 January 2022 while the market cap of the company stood at US$2.26 trillion.
Which overseas stocks can you buy now?
Adobe Inc. (NASDAQ: ADBE)
Formerly known as Adobe Systems Incorporated, Adobe Inc. is a US-based computer software company which operates internationally. The company dominates the software market of content creation, and like Microsoft, the company has bright future prospects with the world moving towards digitisation. Adobe shares closed at US$510.85 on 20 January 2022 while the market cap of the company stood at US$245.79 billion.
Fiverr International Ltd (NYSE: FVRR)
Israel-based online marketplace Fiverr International Ltd offers freelance services, like allowing listing as well as online application for small one-off jobs or gigs. The ongoing supply chain issues aren’t affecting the company and it is possibly profiting from the current labour shortfall as businesses are compelled to get new sources of labour. Fiverr shares closed at US$83.91 on 20 January 2022 while the market cap of the company stood at US$3.07 billion.