If pressed, could you tell me the country that offered the best stock returns in 2007? It's harder than you probably think, because they're not the countries you might expect.

You call that a bull market?
Investors rejoiced as the Dow crossed 14,000 this year, yet the Dow has gained just 7% year-to-date. While that's pretty solid performance, it's abysmal when compared with the rest of the world's equities.

Without further ado, the top five performers:









Cote d'Ivoire




Source: Motley Fool Global Gains research.

This list is incredible to me. Bangladesh? Cote d'Ivoire?

We can learn a few things from this list. First, if you're an American investor, it's absolutely crucial to be invested abroad. The potential returns to be had there are too good to pass up. Second, the best returns often come from obscure places -- not from the countries we read about every day in the papers. And finally, there is some risk involved in investing internationally. For example, because of crime and corruption, Nigeria isn't exactly a country American tourists should be planning to holiday in.

Buy what others aren't
The main lesson here is old hat: To get the best returns, you need to be willing (and able) to look where other investors aren't. That's why the best domestic stocks of the past 10 years were all small caps.

See, huge numbers of investors and analysts watch large companies and popular markets. Google (NASDAQ:GOOG), Chesapeake Energy (NYSE:CHK), and Apple (NASDAQ:AAPL), for example, get coverage from 20 or more analysts. Those three popular stocks also have more than 2,500 ratings in our Motley Fool CAPS community intelligence database.

In other words, they're probably pretty efficiently priced.

You'll get the best returns, however, by finding market inefficiencies. And while another 2,000 investors are covering Caterpillar (NYSE:CAT) and EMC (NYSE:EMC) in CAPS, there's not a single Nigerian listing in the system!

The Foolish bottom line
That's where your opportunity lies as a Foolish investor. But as I said, international investing is not without risks. If you'd like some help finding worthy international investing ideas that you may never have heard of, click here to try our new Global Gains service free for 30 days.

There is no obligation to subscribe, and our team recently returned from a research trip to Latin America with three top-notch stock ideas for Global Gains members.

This article was originally published on Dec. 13, 2006 as "The 10 Best Places to Invest." It has been updated.

Tim Hanson does not own shares of any company mentioned. Chesapeake Energy is a Motley Fool Inside Value recommendation. No Fool is too cool for disclosure.