These Stocks Beat Your Stocks

Investors were pretty sharp in 2006. As the S&P shot ahead 15% and the Dow set new highs, there were plenty of gains to go around.

My head was pretty inflated. I had a nice 23% appreciation from my shares in Coca-Cola, besting rival PepsiCo's meager 8% gain. Kudos for my investment in Campbell Soup, too, which topped larger competitor General Mills' (NYSE: GIS) 20% gain with a market-beating 33% appreciation.   

But my personal bubble burst when I saw what I could have gained. You may feel a little inadequate as well.

The big letdown
Consider investors who found their way into four of the more popular and better-performing stocks in the S&P 500 last year:

Not too shabby. But take a gander at the performance of some large, well-known international stocks:  

Of course, one could stack the table with any stocks to alter the comparison. But in general, great opportunities exist outside the United States. In fact, for every market-beating investment in a U.S.-based company, I'll guess that I can find an international stock that did better.

Why am I so confident? Because on average, the U.S. market isn't growing nearly as quickly as those of many foreign markets. From September 2002 to the end of 2006, 19 countries beat the U.S. market's return. And not by a nose, either -- try Hungary (up 268%) and Austria (up 375%).

It's out there -- go get it
If you truly want to own the best stocks in the world this year, you need to look globally.

But don't just buy anything. Look for the same characteristics you'd want in any U.S.-based investment, and vet your picks even more closely -- added political and economic risks demand that you do so.

If you want a cheat sheet of good foreign stocks, check out our international investing service, Motley Fool Global Gains. We have individual stock ideas, country-by-country analyses, and plenty of resources to help you become a better international investor. To see the depth of research packed into each issue, just click here for a free 30 days of access to the service.

This article was originally published on Jan. 29, 2007. It has been updated.

Fool contributor Dave Mock is a serial bubble-burster and compulsive party pooper. He owns shares of Coca-Cola and Campbell. This longtime Fool is also the author of The Qualcomm Equation. Coca-Cola is a Motley Fool Inside Value recommendation. Baidu.com is a Rule Breakers selection. Posco is an Income Investor choice. The Motley Fool has a disclosure policy.