is international investment a good thing? Why?

Answer 1

It is good for your portfolio because it allows you to take advantage of economies beyond the one you are part of. In addition to that, spreads out risk. If one country is not doing well, you still have a chance to do well in another. I've done OK investing in Canadian, Aussie, Brazilian, Japanese, Irish, and Chinese firms.

Answer 2

Yes international investing is a good thing. 73% of all the publically traded companies in the world are located outside of the United States. By eliminating these companies from your investment universe you really limit yourself. Did you know the top 5 airlines, the top 5 auto makers, 4 of the the top 5 telecom companies are located outside the United States? Did you know if you added 20% international exposure to your portfolio over the past 20 years (80% S&P 500, 20% MSCI EAFE vs. 100% S&P 500 ) you would have reduced your risk by 5% (as measured by portfolio standard deviation) and you would have increased your portfolio returns by approximately 10%. The International markets have outperformed the U.S. markets over the past 5 years. The 5 year average annual return of the S&P 500 is 6.27% vs. the 5 year average annual return of the MSCI EAFE is 16.02% (as of 3/31). The international markets tend to out perform for 10-15 year periods, so we're likely in the middle innings of the performance differentiation. Peter Lynch & Warren Buffet always said "Buy what you know", so why wouldn't you want to buy Nestle (a swiss company), toyota (japan), or Allied Domaq (swiss company and owner of Dunkin' Donuts & Baskin Robbins). My point is that by limiting your investment universe you limit your ability to diversify and out perform!

Answer 3

You will find that as you establish a portfolio of several investments, the standard deviation (aka risk, volatility, etc.) is less for the entire portfolio than it would be for any individual investment, as long as the correlation is not 1 between any of them (in which case there would be no reason to duplicate). By investing in economies other than your own (and therefore different systems) you are diversifying, because the correlation will not be 1, often it could even be negative. This is assuming a well-diversified portfolio in your home country however, and keep in mind accounting systems across borders do not always represent earnings the same as they might in the US, Canada, or wherever you live.

Emerging markets such as China, India, SE Asia, and others certainly provide greater risk but also naturally provide greater possible upside potential (that is your risk premium).

Answer 4

International investing is an excellent investment if you have the experience or knowledge necessary. Do plenty of research before you begin. Good Luck

Answer 5

Yes. For several reasons:
1-Market diversification
2-Potential future growth
3-New consumers to build a company and expand
4-Currency plays a factor. Dollar has been declining. So in the past 5 years, one has witnessed that Euro stocks have risen by around 15-20% a year. Nonetheless, the past does not predict the future. There will be a resurgence of the dollar.

Answer 6

Yes. There are several other companies whose economies are growing at a faster rate than America's (China, India, etc) and investing in these countries should result in greater returns than could be attained by investing in the US.

Also one can invest overseas as a form of diversification.

Answer 7

yes if the grass is greener on the other side. lol. depends on the government, political structure and interest rates also the overall economy of that country should be considered before you invest. after than then you need to find the individual stocks. alittle more work.

Answer 8

DIVERSIFICATION!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The most successful investors have a specific "Asset Allocation" which generally includes 15 - 35% in International Stocks.

You'll never know when a certain sector will be going up. An Asset Allocation (a smart one) will give you exposure to most rising markets at some time. Stick to US stocks only and you'll risk greater fluctuation in your portfolio (beta). And you'll also miss some other great opportunities. I have 30% of our assets in International Stocks. Its worked great for us.

Answer 9

1) Yes.
2) $8 Trillion in Debt and rising. At some point Mexico, Russia, India and China will stop lending money to the United States of America.

Here is your tab:

Answer 10

yes, don't know why.