Of the world's 40000 publicly traded corporations, seventy seven percent are situated on foreign soil, a pretty excellent sign that there are compelling investment opportunities beyond the United States.
Viewed another way, fifty-one percent of the world's $38 trillion total market cap belongs to the foreign arena. United States mutual funds hold $491 billion in international investments.
With a lot of potential investments away from the United States, investing internationally becomes a great strategy to diversify an equity portfolio. Some people contend that there is an increasing correlation in efficiency among the United States and international markets.
But even though world markets generally have a tendency to react much like news or developments taking place around the globe, over time, international and domestic markets often behave differently, helping to smooth out the ride within a diversified portfolio.
Look at the performance of the Morgan Stanley Capital International Europe, Australia and Far East Index, which maps the progress of stocks in developed markets situated in Europe, Australia and the Far East, as opposed to the S&P 500, considered representative of the broader United States stock market.
When one is going strong, the other can lag behind, and that has been the scenario going back as far as 1970. Furthermore, if the MSCI EAFE outperforms the S&P 500, it has done so by a more significant margin than when performances are reversed.
Actually, during the last decade, the United States stock market has never been the leader in the global investment arena. Top performance has been the exclusive domain of foreign indices in that time, and the returns of the S&P 500 occasionally have lagged those of international peers by wide margins.
Global funds invest about 50 % in the United States and half in the rest of the world, making them a smart way for an individual with little or no experience in international investing to test the waters. An excellent example is American Century Global Growth, whose skippers scour the globe for the best growth investment prospects for the fund's shareholders.
You should look at the fund's investment plans, risks, extra charges and expenses very carefully before you invest. Find out what their views are on going public with a company by browsing: companies go public or company go public.
The fund's prospectus, which may be obtained by contacting or visiting American Century's Website, contains this and other information regarding the fund and should be read thoroughly before investing.
Worldwide Investments: Exactly Why This Method Is Practical
Of the world's 40000 publicly traded companies, 77 percent are located abroad, a pretty good sign that there are compelling investment opportunities outside the United States.
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