Global Investing: It Makes Sense

Of the world's 40000 publicly traded businesses, 77 percent can be found abroad, an excellent sign that there are compelling investment opportunities outside the United States.

Viewed a different way, 51 % of the world's $38 trillion total market capitalization sits in the international market. Mutual funds hold $491 billion in overseas investments.

With so many potential investments outside the United States, investing globally becomes an excellent way to diversify an equity portfolio. Some people say that there's an increasing connection in performance in between the United States and international markets.

But while world markets often have a tendency to react similarly to news or developments occurring all over the world, with time, international and domestic markets usually operate differently, helping to smooth out the ride in a diversified portfolio.

Consider the performance of the Morgan Stanley Capital International in Europe, Australia and Far East Index, which charts the progress of stocks in developed markets situated in Europe, Australia as well as the Far East, versus the S&P 500, which is representative of the broader United States stock market.

Whenever one is going strong, the other has a tendency to lag behind, and that's been the case going back as far as 1970. In addition, whenever the MSCI EAFE outperforms the S&P 500, it's succeeded in doing so by a greater margin than when performances are reversed.

Actually, during the past ten years, the United States stock market hasn't been the leader in the global investment arena.

Top performance has been the exclusive domain of foreign indices during this time, and the results of the S&P 500 from time to time have lagged those of overseas peers by wide margins.

Global funds invest about half in America and half in the rest of the world, making them a sensible way for an individual with minimal experience in foreign investing to test the waters.

A good example is American Century Global Growth, whose managers scour the globe to find the best growth investment opportunities for the fund's shareholders.

You should look at the fund's investment goals, risks, and charges and expenses thoroughly before you invest.

Consider their views on investments in a reverse merger shell as wells as corporate mergers. If you need a second opinion from a dependable and well informed financial consultant, search: company go public.

The fund's prospectus, which can be obtained by calling or visiting American Century's Web site, contains this as well as other information about the fund and should be read very carefully before investing.

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