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A Motley Fool UK Special Report
- The value of all shares and the income from them can fall as well as rise.
- You should not speculate using money you cannot afford to lose or rely on dividend income for non-discretionary living expenses.
- You run an extra risk of losing money when you buy shares in certain smaller companies including "penny shares".
- There can be a big difference between the buying price and the selling price of these shares. If you have to sell them immediately, you may get back much less than you paid for them. The price may change quickly, it may go down as well as up and you may not get back the full amount invested. It may be difficult to sell or realise the investment.
- The newsletter may recommend securities listed on overseas stock exchanges. Investors may incur extra dealing charges, administrative costs or withholding taxes when dealing in these securities and should check with their stockbroker before dealing. Many UK stockbroking platforms levy an ‘FX charge’ when dealing in securities in other currencies, and this can be a multiple of the standard dealing cost. This can mean the price needs to move much further in your favour before you will be able to realise a profit. You should also be aware that dividends may be paid in US dollars or in other currencies, and that these could also attract additional charges. If this is the first time you have dealt in US-listed stocks, your broker will probably ask you to complete a W-8BEN form as a formality. This establishes your foreign ownership and prevents double taxation. Bear in mind the time difference as well when dealing on North American markets - you will generally be served best by issuing dealing orders when the relevant market is open.
- There are additional risks in investing on overseas stock exchanges. Companies listed on stock exchanges other than the London Stock Exchange may be subject to different accounting and reporting standards, and your regulatory protection may not be the same. You should seek professional advice if you need a more detailed assessment of these risks.
- Changes in exchange rates may have a significant and materially adverse effect on the value of the value or price of these investments in sterling terms. You could lose money in sterling even if the stock price rises in dollar terms, although this could also work in your favour.
- Performance statistics are calculated on a like-for-like basis with regard to currencies, so US dollar investments will be considered purely in US dollar terms without any adjustment for changes in exchange rates. These may not accurately reflect real returns for a sterling-based UK investor.
- We have taken all reasonable care to ensure that all statements of fact and opinion contained in this publication are fair and accurate in all material aspects.
- Investors should seek appropriate professional advice from their stockbroker or other adviser if any points are unclear.
- This newsletter gives general advice only, and the investments mentioned may not necessarily be suitable for any individual.
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