As an Australian expat, what are my options to invest in the US and Australian stock market?

As an Australian expat, what are my options to invest in the US and Australian stock market?

I will refer later on to an obvious mistake to avoid, but before doing that, I presume you mean you are Australian and living overseas, and not a non-Australian living in Australia.

Anyway, in either case, the best options are similar:

1. Invest with a portable broker, regardless of whether you do it yourself (DIY) or invest through an advisor.. In other words, they don’t close down your account if you move from country to country. Some brokers do. I know two people this year who needed to pay taxes as their broker closed down their accounts. Both refused to send the funds and would only send the cash. One broker who advertised on their website that they do, in fact, send funds and not just cash didn’t fully live up to their promise. They sent 4 funds by in-specie transfer (sending the funds and not as cash) but for some reason refused to do that for the 5th asset. They insisted on liquidating the position and paying to his personal account. So, don’t focus on localised solutions. For this reason, third country brokers that are specialised in the expat niche are often better than brokers from your country of residency or citizenship. Exceptions do apply - for example for American expats.
2. Following on from that point one, the European Union restricted access to some types of ETFs recently….but for brokers that aren’t registered in the EU many of these restrictions don’t apply. That, once again, shows some of the benefits of considering non-local solutions as an expat.
3. If you want to avoid taking tax risks, it is better to own US index funds or ETFs which aren’t domiciled on the US markets. For example, the S&P500 domiciled on the London Stock Exchange (in USD, Euros or any major currency) as opposed to on the New York Stock Exchange. The fees, performance and everything else will be almost identical.
4. Investing in the Australia and US Markets on the same platform should be more than possible. Again, I would go for a third country option if possible.
5. Never think “now isn’t the right time to invest”. There will always be elections, unexpected events and various crisis. People make the same mistakes time and again with this. I was recently invited to make a media comment on this and mentioned how many people made the same mistakes before the 2020 US Election as they did in 2016 - To Humanize The Securities Markets As Rational Is a Mistake

Of course it depends on many different things as well, including your age (as that links to your ability to take risk), how much you want to invest and for how long.

One of the exceptions to the above is if you live in the United States as an expat.

In that case, it is almost always better to keep money with a local American broker, for tax and other reasons.

Get in touch today concerning expat-specialised solutions Personal Investment Services - Adam Fayed

Some reading

Thanks for Reading