Posted by forex at 9:34 AM
Read our previous post
1. Learn a new acronym. Foreign stocks that trade on the U.S. stock exchanges are called American Depositary Receipts, or ADR. They are tradeable certificates backed by shares of the foreign companies held in trust by U.S. banks.
2. Do some research. The banks that hold the foreign stock and issue the ADRs have excellent websites for research. J.P.Morgan has adr.com and the Bank of New York has adrbnymellon.com. The sites allow you to search for ADRs by country, region, industry, or company name.
3. Select the international company or companies in which you would like to invest. Write down the three-, four- or five-letter stock symbols. Three-letter stock symbols trade on the New York Stock Exchange. Four-letter symbols should be for the NASDAQ exchange. Five-letter symbols are for ADRs that trade over the counter. The four- and five-letter symbols should be checked out at Yahoo! or Google Finance, or on the symbol look-up page of your online brokerage account.
4. If your ADR symbol look-up produces a page of information about the company you want to buy, you are set for a regular stock purchase transaction. If you get something that does not look right, you need to do more research or call your broker and ask if they are able to purchase the security for your account.
5. Purchase the ADRs you want. The purchase of an exchange-listed ADR is the same as the purchase of stock of a U.S. company. ADRs that trade over the counter may require a telephone call to your broker to place the trade.
6. Earn some money. As a holder of an ADR, the sponsoring bank will collect the dividends in local currency and transfer them to you in U.S. currency.