If you haven’t added foreign stock investments to your portfolio, you’re not alone. A recent USA Today/Gallup poll found that most American stockowners have not spent a lot of time considering foreign investments. When asked how much thought they’ve given to investing in foreign stocks, 69 percent of those surveyed said either “not much” or “none at all.” Only 31 percent said they have given it “a great deal” or even a “moderate amount” of thought.
A sound investment strategy includes a well-diversified portfolio of stocks and other securities. Including foreign investments can maximize the benefits of diversification.
The challenge is creating the right mix of international investments within various asset classes, values and sizes to best balance risk and reward. To do so requires an understanding of how globalization has impacted U.S. and foreign markets.