Frequently Asked Questions
Welcome to Jeff Opdykes Frontline Investor a service that capitalizes on the rise of the middle class around the globe by trading directly in foreign markets.
To help you get started right away, take a moment to read through the frequently asked questions below.
Question: What does it mean to invest in country?
In country refers to taking your money directly into overseas markets to trade stocks locally on foreign exchanges. It’s Jeffs take on the notion of boots on the ground. We are literally going in country to buy the best stocks the globe has to offer.
It means, in explicit terms, that he typically recommends local shares in local markets that, after all, is where the purest plays on local economies exist. He will rarely, if ever, recommend ADRs, ETFs or mutual funds that trade in America. Lots of other newsletters provide that service, and those that do are completely missing the meaning of foreign investing. There’s nothing remotely foreign about owning Toyota or Samsung ADRs in U.S. markets when those kinds of foreign companies are highly exposed to the U.S. economy.
You can read more about his trading philosophy by reading the Frontline Investor trading manual here.
Question: In which countries will Jeff trade?
In Frontline Investor, we look for opportunities across the globe. But right now, Jeff sees a lot of the best opportunities in Europe (such as in the U.K., Germany, France, Spain, Switzerland, Sweden, Italy, the Netherlands and Austria) and in Asia, namely Hong Kong.
By and large, much of our trading activity will happen in a regions primary markets. But we will at times venture into the smaller markets, too.
Question: How do I go about opening a brokerage account in Asia?
Several possibilities exist, since you can find brokerage firms that will work with you directly in various countries throughout Asia. Jeff encourages you to read his guides for opening overseas brokerage accounts, which detail how to find overseas brokers, how to approach them, how to wire money abroad pretty much everything you need to know to put some of your wealth to work in overseas markets.
His preference for trading Asia, though, is Boom.com in Hong Kong (www.boom.com). We get no financial benefit from promoting Boom; it’s just the brokerage firm Jeff has personally traded through for years.
He likes Boom for a few key reasons:
Foremost, you can trade every primary and secondary market, even a couple of tertiary markets, in Asia, from Tokyo down to Sydney from a single account. Also, you can denominate the account in various currencies, if you choose.
And finally, the firm charges commissions a little differently than you find with online firms in America only you get to trade stocks directly in Asia.
Question: Would you recommend diversifying across currencies?
Yes, but we don’t recommend opening an account in Hong Kong so that you can own Hong Kong dollars, Singapore dollars whatever currency. You’re going to get natural currency diversification through Frontline Investor simply by owning the stocks that Jeff recommends. So the stocks we own in Hong Kong will be priced in Hong Kong dollars, the shares in Australia will be in Aussie dollars and so on.
Thus, theres no need to purposefully seek to diversify your currency holdings, unless you explicitly want to hold a particular currency as an investment in and of itself like the Chinese yuan (which you can trade directly in Hong Kong).
Question: What are the IRS-reporting issues of owning stocks overseas?
If you haven’t already, we encourage you to read Jeffs trading manual for information on this particular topic.
Suffice it to say that the reporting requirements are minimal.
Question: What are lot sizes?
In the U.S. you can buy just one share of any stock, or you can buy 73 shares or 418 shares. But that’s not the case in many markets in Asia, particularly Singapore, Hong Kong and Tokyo.
In Singapore, stocks trade in 1,000-share blocks. That means you buy 1,000 or 2,000 or 3,000, etc. Hong Kongs lot sizes are more forgiving, but also more random. Sometimes the minimum purchase is one share, sometimes it’s 100. Sometimes it’s 500 or even 2,500.
And you have to buy in multiples of the underlying lot size assigned to a particular stock.
Don’t worry; whenever Jeff recommends stocks for the Frontline Investor portfolio, he will tell you the minimum lot size required for purchase. The number of multiples of that lot size you wish to trade is up to you.
Question: How often will I receive Frontline Investor?
You will hear from Jeff each week, mainly with updates on positions or on market developments.
Every other month, he will send you an in-depth research report. In these reports, he will bring you deep-dive analysis of a country he’s recently visited, a company, an industry or a trend we want to exploit and then he will show you explicitly how to exploit it. This is where hell provide most of his new trade recommendations.
Question: Why does Jeff re-recommend positions?
Jeff routinely re-recommends companies we already hold in our portfolio (meaning he suggests a new buy-up-to price for the stock) when the share price is weak due to temporary exogenous events. In those cases, the company’s fundamentals are still strong, so he expects the shares to rise again. That means the current valuation gives us the chance to buy shares for a steep bargain.
When he decides to re-recommend a stock, he will immediately send you an update on the company and a new buy-up-to price, so that you can initiate a new position (if you weren’t able to originally) or add to your existing position.