The biggest mistake to avoid if you are investing in a different country.

Since I started investing, most of my investments were domestic investments. To diversify and reduce risks, I wanted to be more exposed to the rest of the world. Especially the US stock market, which is the biggest market. In the rush to diversify my portfolio, I made a big mistake. This mistake was that I purchased US stock in CAD instead of USD. It may seem that this is not a big deal, but it is. I bought shares in Solar City long before its acquisition by Tesla. The process did not go like I was expecting. I thought if I bought the shares in the currency which are being sold ( USD). I would have that amount in my investment account in USD. It went in a whole different way. My SolarCity shares were both in CAD than transferred to USD and then back to CAD.  Not only I paid the commission fees, I also paid a premium for the exchange of currency, which brought my average cost higher than the stock bought. If I had converted the amount in USD and it would’ve stayed in that amount. After the premium by average transferred was 44.08$ instead of 43.44$.  0.64$ doesn’t seem a lot but when you multiplied by the number of shares you can clearly see the difference. Not only the problem with this is that I had a higher average cost I had to worry about the currency rate. There are two things to worry about and the volatility is transferred. There is a simple solution for this I wish I found it before but if I had you wouldn’t know the mistake and prevent form. The solution I found,  is to open a brokerage account in USD. From that account to buy companies from the US stock market. Like this, you don’t have to worry about the exchange rate because the money will only be converted once.

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