Do you think investing in US stocks is worth the expense?

I've been trying to find out the costs of investing in US shares directly. While US broker fees seem reasonable and comparable to NZ brokerage when you include wire transfer fees, the biggest issue appears to be the cost of foreign exchange.

I can find the exchange rates charged by banks to send international wires in US currency, but I can't find any information on the rates used when converting USD back to NZD via incoming international wire. I've just sent an email to Kiwibank to find out. If it's the same as their cash rates, then the FX costs of transferring a hypothetical US$10,000 there and back comes to a whopping NZ$1200, or about 8%! (0.6507 to convert to USD, 0.7063 to convert back to NZD). Granted you would hope to increase your investment a fair bit, but 4% conversion costs each way seems incredibly steep.

I understand you can use NZForex to cut the cost of foreign exchange, though at least with TD Ameritrade you need to send the initial wire transfer from a NZ bank account in your name. Afterwards they can assess payments from NZForex and decide to accept them or not (confirmed via recent email). Though I'm not sure how much you are actually saving and whether or not you can wire out from TD Ameritrade to NZForex. Does anyone have any experience with this?

I'd like to invest in big global companies like McDonalds, Coca-Cola, Google, Apple, IBM, Wal-Mart etc for the long term, but the fees involved just make me wonder if it's worth it.

So, considering all the costs involved, especially FX costs, do you think it's worth investing in US stocks?

I've used NZForex to fund my TD Ameritrade account with no issues. I didn't need to use a bank account first.
At around 15k I think the spread worked out under 2% for the exchange costs (I'll check my records). I've not tried bring the money back to NZ.

I've found the combination of NZForex and TD Ameritrade keeps the fees reasonable, and worth it to get US exposure.

The other option would be to consider the new NZX ETFs.

Good to hear someone else has used NZForex to fund a TD Ameritrade account and had no trouble. That's promising. The smartshares ETFs are a good option, and I drip-feed a bit into a few of them every month. But their fees are much higher than their equivalents on the ASX or bought directly through a US brokerage account - plus many of them you can buy commission-free which is a bonus.

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Originally Posted by kiwichick

I've been trying to find out the costs of investing in US shares directly. While US broker fees seem reasonable and comparable to NZ brokerage when you include wire transfer fees, the biggest issue appears to be the cost of foreign exchange.

I can find the exchange rates charged by banks to send international wires in US currency, but I can't find any information on the rates used when converting USD back to NZD via incoming international wire. I've just sent an email to Kiwibank to find out. If it's the same as their cash rates, then the FX costs of transferring a hypothetical US$10,000 there and back comes to a whopping NZ$1200, or about 8%! (0.6507 to convert to USD, 0.7063 to convert back to NZD). Granted you would hope to increase your investment a fair bit, but 4% conversion costs each way seems incredibly steep.

I understand you can use NZForex to cut the cost of foreign exchange, though at least with TD Ameritrade you need to send the initial wire transfer from a NZ bank account in your name. Afterwards they can assess payments from NZForex and decide to accept them or not (confirmed via recent email). Though I'm not sure how much you are actually saving and whether or not you can wire out from TD Ameritrade to NZForex. Does anyone have any experience with this?

I'd like to invest in big global companies like McDonalds, Coca-Cola, Google, Apple, IBM, Wal-Mart etc for the long term, but the fees involved just make me wonder if it's worth it.

So, considering all the costs involved, especially FX costs, do you think it's worth investing in US stocks?

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It is depend on how we select stocks in any type of market. There are winners in almost every markets such as advanced, emerging and frontier markets. For example these days poultry and egg related stocks are outperforming other stocks globally.

Cal-Maine Foods Inc (NASDAQ:CALM) was a huge mover on Friday. The stock increased by 6.38% hitting $60.4. About 1.49 million shares traded hands. It has risen 62.15% since March 16, 2015 and has outperformed by 63.59% the S&P500.

http://www.forbes.com/sites/investor...g-term-trends/

Five Food Stocks To Ride Long-Term Trends

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked site.