International Investing It Makes Sense
Below is a MRR and PLR article in category Finance -> subcategory Investing.
International Investing: Why It Makes Sense
Overview
With 77% of the world's 40,000 publicly traded companies located outside the United States, the global market offers a wealth of investment opportunities. Moreover, international markets account for 51% of the world's $38 trillion total market capitalization. It's no wonder that U.S. mutual funds have invested $491 billion overseas.
Why International Investing?
Investing internationally can significantly diversify an equity portfolio. While some argue that global markets are increasingly correlated, domestic and international markets still often behave differently. This divergence can help stabilize a diversified portfolio over time.
Consider the performance of the Morgan Stanley Capital International (MSCI) Europe, Australia, and Far East Index compared to the S&P 500, a benchmark for the U.S. stock market. Historically, when the MSCI EAFE performs well, the S&P 500 tends to lag, and vice versa. Notably, the MSCI EAFE has often outperformed the S&P 500 by a larger margin when it does lead.
International Markets' Strong Performance
Over the past decade, U.S. stocks have never been the top global performers. Instead, international indices have consistently led the way, sometimes leaving the S&P 500 trailing by considerable margins.
Getting Started with Global Funds
Global funds, which split investments about evenly between the U.S. and international markets, are an excellent choice for investors new to this space. One example is the American Century Global Growth fund. Its managers seek the best growth opportunities worldwide, providing a balanced investment option.
Before investing, consider the fund's objectives, risks, charges, and expenses. The fund's prospectus, available by contacting American Century or visiting their website, contains essential information and should be reviewed carefully.
Enhance your portfolio by exploring the vast opportunities that international investing offers. It's a strategic move toward achieving more diversified and potentially rewarding investment outcomes.
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