S & P 500 v FTSE 350 v other markets for long term investment

[Getafix]

Hi,

I am looking to invest long term using a value approach. However, before I start I would like as many factors stacked up in my favour. I am based in the UK which has relevance to the following question:

Which market should I invest in (for long positions)? FTSE, S&P etc, I am looking at the index that has made say the most gains in the last say 30 years (with least say annual standard deviation). Perhaps there is somewhere I can do a comparision? Probably difficult because of the currency issue, so, most likely willl need to look at yearly differences percentage wise for each index? Anybody know the answer already. I am also considering factors such as stamp duty versus non for foreign stock but also exchange rate differences and perhaps affects of re-invested dividends.

Any help much appreciated.

 

[Getafix]

I should mention I'm looking at to invest in indvidual stocks not an index tracker. But would prefer to invest in a more stable/profitable (historically) stock exchange.

 

[Getafix]

According to marketwatch it seems S&P is the overall winner even though FTSE 350 better overall in last 5 years. Have a look here. I am assuming I have got correct index for FTSE 350 (XX: NMX)?

 

[Getafix]

I am assuming exchange rates will not make much of an impact when looking at such a big difference? Just a matter of timing the exit!? Opinions/feedback much appreciated?

 

[greigmcl]

Why not use a broker that lets you hold multiple currencies and buy shares on more than one exchange? That way you can focus on the company rather than the index, as long as the market is big/smart enough for the value in the company to be recognised and rewarded.

Tax treatment of dividends will probably have an impact that you'll need to factor in. Off the top of my head I pretty sure that Shell and Unilever have multiple listings for this reason (amongst others).

I haven't been around long enough to comment on the currency thing, but I think it could be positive or negative depending on your timing. The only big problem I can see is if the currency is at a low and for whatever reason you need to transfer it back in a hurry.

 

[Getafix]

Thanks for reply greigmel, I have done some digging this morning and seem to be going round in circles. The tax treatment of dividends is 10% withheld at source for UK investments regardless of whether in an ISA or not and can not be claimed back (even in an isa). However it appears in the US they have a 30% withholding tax. 15% of which I understand to be non-refundable, the other 15% can be refunded by filling in a W-8BEN form. I am only looking at this from an ISA point of view and don't seem to be able to find out whether this 15% can be claimed back if investment vehicle was an ISA. It seems from what I have read you cannot? Is anybody able to confirm?

So it seems the pros and cons of US investment from an ISA are :
Pros
1) Stock market made better returns percentage wise to ftse over last 20 years (if my indexes selected are comparable)
2) More data available for US stocks and more readily available literature/training for those markets.
3) No stamp duty (0.5% in UK).
Cons
1) Dividend payments of 30% compared to UK dividends (10%)
2) Exchange rate losses

One further point on the exchange rate issue, I have read it is possible to do a hedge on the US/GBP to safeguard against fluctuations in exhange rates. This is possibly the best way to go but need to learn much more, I am sure there will be hits in terms of commission on purchase/sale which could negate this use for small investment amounts?

Anybody knowledgeable enough and kind enough to confirm US 30% tax on dividends in an ISA wrapper?