International Investing Why it Makes Sense
Below is a MRR and PLR article in category Finance -> subcategory Investing.
International Investing: Why It Makes Sense
Summary
With 77% of the world’s 40,000 publicly traded companies based outside the United States, international markets offer abundant investment opportunities.The Global Appeal
The international market commands a significant share of the world’s economic pie, encompassing 51% of the $38 trillion market capitalization. This allure is reflected in U.S. mutual funds, which invest $491 billion in overseas ventures.Diversification Benefits
Investing globally is a powerful strategy for diversifying an equity portfolio. While some argue that global markets are increasingly in sync, in the long run, international and domestic markets tend to diverge, providing a smoother investment journey.Performance Insights
Comparing the Morgan Stanley Capital International Europe, Australia, and Far East Index (MSCI EAFE) with the S&P 500 reveals interesting dynamics. Historically, when one market excels, the other often lags. Furthermore, when MSCI EAFE outpaces the S&P 500, it does so with a wider margin than the reverse scenario.Over the past decade, international indices have consistently outperformed the U.S. market, with the S&P 500 sometimes trailing its global counterparts significantly.
Exploring Global Funds
Global funds, which allocate approximately half of their investments to the U.S. and the other half internationally, offer an ideal entry point for novice investors. An example is American Century Global Growth, where managers seek out top growth opportunities worldwide.Before investing, consider the fund’s objectives, risks, charges, and expenses. The prospectus, available on American Century’s website or by phone, offers detailed information and should be reviewed thoroughly.
Explore the world of international investing to diversify and enhance your financial portfolio.
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