Foreign Stocks: Do U.S. Investors Need Them?

Exposure to international markets is important for U.S.-based retail investors. But what, exactly, should that look like? I asked that of Eddy Elfenbein, who writes about stocks at Crossing Wall Street and was named by CNNMoney as "the best buy-and-hold blogger" on the Web.

Watch our conversation here (run time: 1:57), or read the transcript below:

Brian Richards: How do think about international investing? A company like Johnson & Johnson derives a great deal, or Coca-Cola earns more than half its profits overseas anyway. So it's kind of an international investment just by virtue of its revenue breakdown. Is that sufficient for a U.S.-based investor, or do you think that people should actually look at companies based overseas or indexes that …

Eddy Elfenbein: It actually is. By buying U.S.-domiciled companies you really are getting a huge amount, nowadays, you're getting a huge amount of global footprint going along with the companies. So I don't think there's a necessary need to go out.

I mean, you take a company like Nokia. Well, what company is Nokia? That's Finnish, right? So when the board of directors, once a quarter they all fly into Helsinki and they all get together. Do you think they're speaking Finnish at the meetings? I don't think so. They are these companies that almost don't have a domicile, and so just buying New York Stock Exchange-listed companies you can get plenty of coverage in regular U.S. companies. You can go overseas and look for bargains. Any place there are bargains, any place that's not well covered, I think, is a good place to look for opportunities.

For more from my interview with Eddy Elfenbein, click here or here, or check out his site, Crossing Wall Street.

Brian Richards has no positions in the stocks mentioned above. The Motley Fool owns shares of Coca-Cola and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Coca-Cola and creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.


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