Docstoc

INTERNATIONAL INVESTING

Document Sample
INTERNATIONAL INVESTING Powered By Docstoc
					International Investing: Why it Makes Sense
Of the world's 40,000 publicly traded companies, 77 percent are located abroad, a pretty good sign that there are
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. U.S. mutual funds hold $491 billion in overseas
investments.

With so many potential investments outside the United States, investing internationally becomes a great 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 while world markets often tend to react similarly to news or
developments occurring around the globe, over time, international and domestic markets tend to behave differently,
helping to smooth out the ride in a diversified portfolio.

Consider the performance of the Morgan Stanley Capital International Europe, Australia and Far East Index, which
charts 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 U.S. stock market. When one is going strong, the other tends to lag behind,
and that has been the case going back as far as 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 10 years, the U.S. stock market has never been the leader in the global investment arena. 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 wide margins.

Global funds invest about half in the United States and half in the rest of the world, making them a smart way for
someone with little or no experience in international investing to test the waters. A good example is American
Century Global Growth, whose managers scour the globe for the best growth investment opportunities for the
fund's shareholders.

You should consider the fund's investment objectives, risks, and charges and expenses carefully before you invest.
The fund's prospectus, which can 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.

				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:18
posted:11/15/2011
language:
pages:1