Do you, by any chance, have a little voice in the back of your head needling you to find some time to look into international investments? Is it making you wring your hands, wondering if you're missing out on big gains abroad? Well, that little voice isn't too far off base. Permit me to share some eye-opening numbers with you, via a little pop quiz:
- Which city sports the most headquarters of Fortune Global 500 companies?
- Since 1993, how many years was the U.S. stock market the world's top performer?
- In 2005, how many of the 15 best-performing stock funds focused on U.S. equities?
OK, hotshot
Here are the answers:
- Tokyo has the most HQs, at 52, followed by Paris with 27. The U.S. comes in third, with New York City and its 24 companies. Following it are London (23) and Beijing (15).
- In no year since 1993 has the U.S. stock market been the world's best performer.
- None.
Are you starting to sense that America isn't the only game in town? Read on.
- Over the past three years, the iShares Emerging Markets Index
(AMEX:EEM) , which tracks the performance of many international stocks, has more than doubled in value, beating the S&P 500's performance nearly threefold. - According to Forbes, "India's population is among the world's youngest, with 60% of its people under age 32. An emerging middle class of 300 million provides a phenomenal growth prospect." To put that in perspective, India's middle class is the same size as the entire U.S. population.
The world of international investing isn't even as esoteric as you might think. You already know many of the big players. What's (nearly) the world's largest automaker? Toyota
The world's largest confectionary company? Cadbury Schweppes
The largest maker of alcoholic spirits? Diageo
Firms like these, based outside the U.S., have clearly been growing like gangbusters for a long time.
What to do
So now that your appetite is whetted a bit for international investments, what should you do? Well, as I've cautioned before, don't jump in without being careful. After all, few countries offer the level of investor protections that ours does. Few nations are as politically and economically stable as ours, either. That said, consider tapping the expertise of those who are very familiar with the rest of the world. They can help make you wealthier.
For example, you might opt for an international mutual fund, such as the Julius Baer International Equity A fund, which has racked up average annual gains of 16.8% over the past decade, invested in the likes of Vodafone
Another option is to invest in individual stocks. This can be a little more risky, but it can also offer much more bang for your bucks. Considering that there are so many rapidly growing companies around the world, especially in emerging markets, this option is well worth exploring. You might find some winners by exploring the holdings of successful international mutual funds (though their lists of holdings aren't always too recent). You might also accept our help.
I invite you to try out our brand-new service, Motley Fool Global Gains, which is dedicated to finding you the best international investments. It's headed up by longtime Fool Bill Mann, who has a lot of international experience under his belt, along with considerable investing savvy. Try it for free and see what you think.
Don't rely on just my opinion, though. Read up on the topic in these articles, as well:
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Longtime contributor Selena Maranjian owns shares of no company mentioned. Diageo and GlaxoSmithKline are Income Investor picks. Vodafone is an Inside Value recommendation. The Motley Fool is Fools writing for Fools.
