Cons of investing in local stocks

[Starmix]

Local stocks can have limited diversification. It focuses solely on local stocks and limits your diversification, which means that if the local economy suffers, your portfolio will likely suffer as well. Diversification across different sectors and geographies is crucial for mitigating risks.

There will be a higher correlation. Local stocks tend to be more correlated with the overall performance of your local economy. This means that your investments will experience similar fluctuations to your national economy. Local markets might have lower trading volumes than larger international markets, making it harder to buy or sell quickly at favorable prices. Your investment will be susceptible to specific events that affect your local economy, such as political instability, natural disasters, or industry-specific issues. Investing in local stocks can be a viable strategy for some investors, but it is not automatically a good or bad.

 

[Nomad]

That's not true, you can invest in your local stock market and choose from thousands of portfolios. It depends on how big your local stock market is

 

[Suba]

There are some cons that I found in local stocks such as buying a minimum of 1 lot or 100 shares, while if you buy global stocks you can buy 1 share or even less than one share or in fractions. In addition, local stocks are often easily influenced by market sentiment, so novice investors will often lose. In addition, liquidity risk, potential capital loss, etc. are common disadvantages of stock risk.

 

[Starmix]

Local markets might have lower trading volumes than larger international markets, making it harder to buy or sell quickly at favorable prices, and this worries me because I invested in local stocks.

 

[Springtime]

Agree. Just invest in local stocks limit your chance to gain from international market. I currently in Hong Kong stock, US Stocks.

 

[Starmix]

I am worried about my investment on local stocks. I am new to this so I do not have any idea about it. I still hope I will gain some profits.

 

[Augusta]

Yes you would go through currency risk, limited opportunities, and the potential for overconcentration. you might need to diversify

 

[Starmix]

I am still positive that my local stock will not be affected politically and the existing rage of the economic prices.