Would you consider looking only at stocks whose tickers start with the letters A through M? What if you refused to invest in any company with its headquarters more than 1,000 feet above sea level? You wouldn't set your screens to exclude any corporation with a blond, redhead, or grey-haired CEO.

For each of those, you'd arbitrarily exclude half of your investing opportunities. But that's what scores of American investors do by looking only at domestic stocks.

According to the premier issue of Motley Fool Global Gains, 51% of total world market capitalization comes from companies domiciled outside the United States. Though the United States has the world's largest stock market by a sizable margin, it no longer accounts for the majority of the world's public investments. Of the world's 20 largest public companies, only eight are American. (Although ExxonMobil's (NYSE:XOM) $420 billion market value still dwarfs that of No. 4, Russia-based natural gas concern Gazprom.)

Safe at home
There are, of course, reasons to keep your investing eye turned to America. Companies are bound by relatively strict corporate governance. We're not likely to see armed militias taking over the White House. And there are still opportunities to find great buys domestically.

But by restricting your investing to inside our borders, you're missing out on roughly half of the world's opportunities. The market in Indonesia climbed 43% in 2006, according to data compiled by the Global Gains team. Morocco's market was up 51% on the year. Croatia leapt 72%. And Zimbabwe soared an astronomical 573%.

Granted, I don't have an in-depth knowledge of the corporate environment in Harare and would not feel comfortable sending my money there. But there are dozens of countries that are eminently more knowable and that present us with incredible opportunities.

China patterns
China is just one example where investors are being handsomely rewarded. While there are many causes for concern in the country -- capricious legislation from the government, for example -- China-focused funds enjoyed a 2006 without peer.

According to Washington Post data, seven of the top 10 performing funds of last year were China-focused. The best of the bunch, Dreyfus Premier Greater China (DPCAX), gained an eye-popping 86% during 2006. The fund's biggest stakes were PetroChina (NYSE:PTR) (4.06% of net assets) and Sinopec (NYSE:SHI) (3.82% of net assets). That goes to show the potential payoff of investing in overseas companies.

Many individual stocks in China share similar trajectories. The 33 companies that make up the China tag in our Motley Fool CAPS database have enjoyed an average 53% increase over the past year (as of Jan. 8), powered by China Life Insurance (NYSE:LFC) and Ctrip.com (NASDAQ:CTRP) -- and that's despite poor one-year returns from TOM Online (NASDAQ:TOMO) and Hurray! Holding (NASDAQ:HRAY). CAPS players think this impressive run will continue -- 23 of those Chinese companies have ratings of either four or five (out of five) stars.

A broader view
For most U.S. investors, picking stocks in foreign countries is more challenging, more confusing, and downright scarier than investing here at home. Funds are one way to go, but be warned: That can be costly. That Dreyfus Premier Greater China fund I cited earlier? It charges a 5.75% load and dings you 1.88% in expenses. Ouch.

With a keen eye and a greater tolerance for risk and exploration, the rewards of picking your own international stocks can be tremendous. When the goal is to increase the value of your portfolio, it doesn't make sense to close yourself off to half the possibilities.

You can get started on your international journey by seeing all the companies we've recommended over at Global Gains. A 30-day trial is free and gives you full privileges to the service. Click here to learn more.

Roger Friedman is the managing editor of newsletters. Roger does not own shares of any company mentioned. Ctrip.com is a Motley Fool Hidden Gems pick. TOM Online is a Stock Advisor pick. The Fool has a disclosure policy.