International Investing Inquiries (Foreign Tax Credit, IRA, Data, etc.)

[DoddDisciple]

Hi, all :)

 

If anyone wants to a help a remedial student of the markets, I'd appreciate it! Feel free to add your own questions here as well.

 

() IRA vs Taxable

 

I understand that you can get a foreign tax credit on taxable accounts, and that if you have a choice between getting IRA or Roth IRA taxed, you want IRA since at least you invested more money at the start. What I don't get is if the foreign tax credit is really worth it. It looks like you have to have sizable dividend income before you want to claim it above the $600 per person amount.

 

I'm also not sure if the same foreign tax withholding can occur on special dividend payments and liquidation/buyout payments. I'm guessing no for the latter, but possibly yes for the former.

 

Additionally, between IB and Fidelity, which one is better at handling the paperwork to make sure the lower amount of withholding/paperwork occurs?

 

() Excluded Exchanges and Lot Sizing

 

I know Fidelity says they can pretty much get any stock, but of course you have to pay. Additionally, I've noticed that through say IB and online trades at Fidelity, you can't access JASDAQ or Osaka stocks. Are there any other excluded, notable exchanges that aren't accessible among the countries these guys service?

 

Aside from some weird minimum lot sizing with Japan, what other countries/exchanges impose things like this? I see it in Singapore as well.

 

() OTC (Foreign Ordinary)

 

These don't have tax withholding and can be held within IRAs, or at least I thought. Watsa had a post on here about FFH and it looked like taxes were inappropriately being held or something at IB.

 

() Level 2 Data, Other Data

 

Level 2 data is the to the minute orderbook. Level 1 shows lowest sell and highest buy. I've read about people doing a market order and some guys painfully prices out there waiting for a sucker to fill them. Where can I get free Level 2 data to see if my limit order is too generous based on the order book for international stocks?

 

Is any of the IB stuff worth subscribing to? I see Reuters Worldwide Fundamentals for $7 a month, but I'm guessing that's just data and can't be screened. May be worth it though for a quick look at in addition to Financial Times before investing.

 

Thanks in advance to everyone who chimes in and again, if you have your own questions, put them on here :)

 

 

[west]

I just wanted to bump this thread.  I just found out e*trade doesn't allow you to trade international (read: Japanese) equities in their Roth accounts.  If anyone has suggestions on where to go to do this, I would love to hear them.  Thanks in advance!

[DoddDisciple]

I think the only two US options are Fidelity & Interactive Brokers. Even with the monthly and quarterly IRA fees, IB still ends up being cheaper unless the balance is super low. I don't know of you can hold foreign currencies in IRAs though to be honest.

 

Japan would be just the sort of market I'm curious about. I know they have some lot size restrictions based, maybe 100-1000 share minimums. At IB, I think only the Tokyo exchange is available but not JASDAQ or Osaka. Both are available at Fidelity, but the costs are higher, and you'd be better off exchanging from USD to YEN for cheap at IB and then wiring it over to Fidelity.

 

The filing frequency is something I really need to look at in more detail. I'm not sure if most global screeners take into account firms that only file 1, 2, or 3 times a year. 

[DoddDisciple]

Of course, you can call and ask, but my experience on that has almost always been that I have to tell the representative my life story before being transferred to another department where I also have to tell my life story :)

[DoddDisciple]

Any luck on finding global level 2 data? Or the order book, if that differs in some way?