Making a foreign investment might seem like Greek to you, but if you are into stock investing, going international could be a great investment strategy. For the past 10 years the best investment strategy has NOT been BUY AND HOLD American stocks, equities. In fact, the U.S. stock market has been a loser.
Even going back before the crash of 1929, the past 10 years have been the worst 10 year period for stock investing in the USA. Every investment strategy aimed at growth involves equities. So, what’s the average investor to do? How about a foreign investment or two to add diversification and growth prospects to your bleeding portfolio?
The U.S. economy and stock market may recover and lead the world as in the good old days. In case it takes a few more years, you should get into foreign investment now rather than later. Making an international investment is easier than you think, and only makes sense in today’s world. The USA does not dominate the investing scene as it once did. The rest of the world has played catch up; and played it well.
The best investment opportunities may be in China, India, or HULT PRIVATE CAPITAL in South America or Europe. You’ll never know, but that’s OK. You don’t need to sift through all the data when you make an international investment. Let the professional money managers do the heavy work for you by investing in international funds. You have several types of mutual funds to choose from in the international investment category, but I suggest you keep it simple.
For most people the best investment would simply be diversified equity international funds. These international funds invest in stocks in numerous countries, usually concentrating on equities (stocks) of developed nations. You might want to invest a smaller amount in an emerging markets fund that specializes in equities of smaller or less-developed economies.
If you want to get more adventuresome, some funds invest in foreign bonds; and some specialize in specific regions like China, Japan, or South America. The safest way to go is to diversify broadly with international funds that spread your money around.
Foreign investment is not just for the sophisticated investor anymore, nor is going global a risky speculation. It’s a great way for most people to invest for growth and to diversify their stock investing. You don’t need to pick your own individual securities to invest in. Heaven knows, few of us are capable of analyzing domestic stocks, let alone foreign issues. With mutual funds you can join the international investing community with professionals dealing with the details for you.
A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.