Additional portfolio diversity. Currency diversity. Greater growth opportunities. These are all good reasons to invest in Toyota (NYSE:TM) and other companies with the bulk of their operations outside the United States. They're also very valid reasons for considering a company like PepsiCo (NYSE:PEP), which is headquartered in the United States but gets revenue from just about every corner of the globe.

But all of these reasons are trumped by the fact that total U.S. market capitalization now makes up just 45% of the world's total market capitalization.

It wasn't always this way. In 1974, the United States was 57% of the world's market capitalization. In 2001, it was still at 55%, but the weakening of the dollar over the past few years and gains in Asian and European markets have allowed the rest of the world to leapfrog the U.S. -- even as the Dow and S&P 500 trade within shouting distance of their all-time highs.

Don't limit your opportunities
This still means that the U.S. is, by far, the largest market in the world, and seasoned investors know that sizable gains can be found in value, growth, and income-producing investments in the United States. But when it comes right down to it, it's tough to make an argument to ignore or marginalize more than half of the opportunities in the world.

This becomes more important when you consider that globalization cuts both ways, and American companies won't be the only ones benefiting from competing outside their borders. A fantastic example is the cement industry, where Cemex (NYSE:CX) of Mexico and Lafarge (NYSE:LR) of France have built extremely strong positions inside and outside their home countries. And there are smaller stories as well. Ban deodorants, Jergens moisturizers, Biore skin care, and John Frieda hair-care products are all well-known brands you'll find on the shelves of your local retailer, and they're all owned by the Japanese company Kao (Pink Sheets: KCRPY.PK), which fights it out with Procter & Gamble (NYSE:PG) and other personal-care giants in the U.S., Japan, and elsewhere.

Foolish final thoughts
Investing in foreign companies also requires understanding the political and cultural undercurrents in other countries. This is a challenge, because we obviously don't experience firsthand everyday life in other places the way we do at home. It means understanding currency risk, and digging into financial statements in which some of the accounting standards can be different than those in the U.S., such as the inflation accounting that FEMSA (NYSE:FMX) has to report under Mexican GAAP. Fortunately, the Internet helps bring a lot of this news and information directly to investors for next to nothing. And international accounting standards, with the guidance of the International Accounting Standards Board (IASB), are gradually moving closer to standardization, making the rest of the world an easier place to understand and invest in.

At The Motley Fool, we recognize that you may want to invest internationally, but want some assistance learning the ins and outs. Or perhaps you're already well-versed and are just looking for well-researched investing ideas. Either way, consider a 30-day free trial to our new Global Gains service led by Bill Mann. In the first two issues, we've already found excellent values in Africa, Asia, and next door in Canada -- and our next issue, featuring two new stock picks, releases today at 4 p.m. ET.

Nathan Parmelee is an analyst for Global Gains. At the time of publication, he had no financial interest in any of the companies mentioned. Cemex is a Motley Fool Stock Advisor selection. The Motley Fool has a disclosure policy.