Intercontinental Investing: It All Makes Perfect It Easy
Of the world's 40000 publicly traded companies, 77 percent can be found overseas, a pretty good sign that you will find compelling investment opportunities 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 overseas investments.
With a lot of potential investments outside the United States, investing internationally becomes a terrific way to diversify an equity portfolio. Some people contend that there is an increasing correlation in performance between the United States and international markets.
But even though international markets often tend to behave similarly to news or developments occurring around the globe, over time, international and domestic markets tend to behave differently, and this helps to smooth out the ride in a diversified portfolio.
Think about the performance of the Morgan Stanley Capital International Europe, Australia and Far East Index, which maps the progress 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 has a tendency to lag behind, and that has been the case since 1970. In addition, when the MSCI EAFE outperforms the S&P 500, it has done so by a greater margin than when performances are reversed.
In fact, during the past decade, the United States stock market has never been the leader in the global investment industry.
Top performance has been the exclusive domain of international indices during that time, and the returns of the S&P 500 sometimes have lagged those of overseas peers by extensive margins.
Global funds invest about half in the United States and 50 percent in the rest of the world, making them a good way for somebody with little or no experience in international investing to test the waters.
A good example is American Century Global Growth, whose professionals scour the globe for the best growth investment options for the fund's shareholders.
You should consider 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 need a second opinion from a reliable and well informed financial adviser, search: company go public.
The fund's prospectus, which may be obtained by calling or visiting American Century's Web site, contains this and other information about the fund and should be read carefully before investing.
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