International Investing: It All Makes Perfect It Easy
Of the world's 40000 publicly traded companies, 77 % are located in another country, a very good sign that you'll find compelling investment options outside the United States.
Viewed another way, 51 percent of the world's $38 trillion total market capitalization belongs to the international arena. Mutual funds hold $491 billion in international investments.
With so many potential investments outside of the United States, investing around the globe becomes an incredible way to diversify an equity portfolio. Many people claim that there is an increasing correlation in performance between the United States and foreign markets.
But while foreign markets often have a tendency to behave similarly to news or developments happening around the world, over time, international and domestic markets tend to behave in a different way, helping to smooth out the ride in a diversified portfolio.
Look at the performance of the Morgan Stanley Capital International in Europe, Australia and Far East Index, which maps the growth of stocks in developed markets located in Europe, Australia and the Far East, versus the S&P 500, considered representative of the broader United States stock market.
When one is going strong, the other one tends to fall behind, and that's been the case ever since 1970. Additionally, when the MSCI EAFE outperforms the S&P 500, it has done so by a greater margin than when performances are reversed.
In fact, in the past ten years, the US stock market hasn't been the leader in the global investment world.
Top performance has long been the exclusive domain of overseas indices during that time, and the returns of the S&P 500 sometimes have lagged those of foreign peers by wide margins.
Global funds invest about 50 % in America and 50 % into the rest of the world, making them a good way for someone with little or no experience in international investing to test the waters.
An excellent example is American Century Global Growth, whose managers scour the world to find the best growth investment options for the fund's shareholders.
It is best to think about the fund's investment objectives, risks, and charges and expenses carefully before you invest.
Consider their opinions on investments in a reverse merger shell as wells as corporate mergers. If you want a second opinion from a dependable and knowledgeable financial consultant, search: company go public.
The fund's prospectus, which may be obtained by calling or visiting American Century's Site, contains this along with other information about the fund and should be read carefully before investing.
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