A Polish investor is looking for opportunities on foreign markets

When a Polish investor starts to invest globally, he is looking more for an opportunity in the form of a higher one profit on shares than in Poland. He is less concerned with portfolio diversification.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

As bargains, it's only abroad?

eToro asked investors in 12 countries under Individual Investor Pulse researchwhy they decide to invest in foreign markets or why they prefer domestic stocks. It shows that when Poles choose foreign markets, they are primarily driven by the possibility of achieving higher rates of return (24% of responses in Poland vs 21% globally) and the attractiveness of these markets, measured by the possibility of buying cheaper shares or achieving higher revenue growth by companies ( 25% in PL vs 17% globally). For Poles, however, the diversification of their portfolio is less important (22% in Poland vs 35% globally). This means that Poles in foreign markets are looking for opportunities (faster-growing or cheaper shares) rather than diversification. In this respect, Poles differ not only from investors from the USA, Great Britain or Germany, but also from Czechs and Romanians who prefer diversification. Poles and Czechs perceive foreign markets also through the prism of wider access to various sectors that are not at all or are much less represented in their domestic markets.

Why are you investing in foreign stocks?

Source: eToro Puls Individual Investor

This motivation is due to the fact that only 8 percent. of the surveyed investors in Poland (vs. 11% globally) believe that domestic stocks give higher rates of return. Poles also do not believe in superiority that foreign markets are more risky than the domestic one (20% in PL vs 21% globally).

Why do you choose domestic stocks more often?

Source: eToro Puls Individual Investor

The problem is lack of knowledge

However, the lack of knowledge and understanding of foreign markets remains a serious barrier. As much as 56 percent. Poles (vs. 45% of responses globally) believe that they know and understand the domestic market much better than foreign markets. This indicates the need for further education of Poles on foreign investing, especially in the context of diversification and building investment portfolios. Because in the long run, strategies based on wide diversification work better in the financial market than attempts to look for opportunities.