Globalization is the dissolution of barriers to trade and the tendency of the world's businesses to integrate customs and values. Globalization is making it increasingly easy to travel, correspond and even invest in other countries.

Investing money in your own country's stock market is relatively simple. You call your broker or login to your online account and place a buy or sell order. Investing in a company that is listed on a foreign exchange is much more difficult. Would you even know where to start? Does your broker provide services in other countries? For example, imagine the commission and foreign exchange costs on an investment in Russia or Indonesia.

However, now there is an easy way around this through American depositary receipts (ADRs). More than 2,000 foreign companies provide this option for U.S. and Canadian investors interested in buying shares. In this tutorial, we'll explain how this investment vehicle works and help you sort out whether it could be a good choice for your portfolio.

Next: ADR Basics: What Is An ADR? »



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