When looking for safe countries in which to invest, you need look no further than Scandinavia. By getting some northern European exposure into your portfolio, you're taking advantage of stable and prosperous industrialized countries, which have largely escaped the high unemployment and financial turmoil in other European nations. To take part, you need look no further than mutual funds, or you can take the plunge into individual company shares.
Items you will need
- Online brokerage account
Sign up for an online brokerage account and fund it with a check delivered through the mail or money transferred from your bank account. Use the site's research features to track down mutual funds investing in Scandinavia; Fidelity, for example, offers the Nordic Fund. There are Scandinavian fund companies that might be available through your brokerage as well, including the DNB Scandinavian fund. Go to the fund's own website and request a prospectus online; take heed of expenses charged to investors by the fund manager.
Research exchange-traded funds, which hold portfolios much like mutual funds but trade like ordinary stock shares on a public exchange. Major Scandinavian exchange-traded funds include iShares MSCI Sweden (and Denmark and Norway), Global X Norway, and Global X FTSE Nordic Region. Each of these exchange-traded funds pays dividends; their major investments include energy, financials, electronics and consumer products. You buy exchange-traded funds at either a premium or discount to the net asset value of their holdings; by buying at a discount, you're getting a head start on an eventual profitable trade.
Research individual Scandinavian companies. Major stocks in the region include Ericsson, Statoil, Novo Nordisk, Sedbank, Nokia and Volvo. Call the company's investor relations department and request an annual report; read the balance sheet and income statement to get a handle on the company's financial health and outlook. Use your brokerage account to look up independent research reports on your stock.
- Put your stock or fund shares in an IRA (traditional or Roth) to get some help on the taxes.
- Contribute equal amounts to your brokerage account each month from your "free" cash flow (i.e., savings).
- Watch Scandinavian currencies; Norway uses the euro while Sweden and Denmark retained their own money. If Scandinavian currencies rise, your dollar-denominated assets will usually gain in value.
- Don't use money to invest that you can't afford to lose.
- Don't try to time the market or jump in and out of shares and funds as their price swings up and down. The commissions charged by the brokerage will kill any profit you make.
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