Smart investors follow their own path. But knowing where the competition is putting their money can give you valuable insight about prevailing trends and help you make a decision about whether to invest with them or take a contrarian position. And although being rich doesn't necessarily mean that you're a good investor, watching how the wealthy invest their money lets you take into account the myriad additional investment options to which ordinary investors don't have access.

Heading out
Interestingly, investors with an eight-figure net worth and up are sticking with a long-term trend that has worked for more than a decade: They're buying international stocks. According to a study from the Institute for Private Investors as reported in the Wall Street Journal, 64% of wealthy investors surveyed plan to add to positions in global stocks in 2011. The survey polled 72 families, the vast majority of whom have $50 million or more in assets.

Of course, the wealthy aren't only interested in foreign stocks. Between 30% and 40% expected to add to hedge funds, U.S. stocks, commodity investments, and real estate. But the impact of the greater move out of their home country will skew portfolios of U.S. millionaires slightly more toward the international arena, with domestic holdings falling from 76% in 2009 to 68% this year. That amounts to more than $1 trillion moving from the U.S. to international markets.

Meanwhile, the rich are taking away exposure in cash and municipal bonds. Like many people, rich investors got defensive in the aftermath of the financial crisis, raising holdings of safer investments. But with many now seeing municipal bonds as the next problem area in the credit markets, the rich apparently believe stocks are worth taking a chance on.

What you should do
Whether you're rich already or just on your way to becoming wealthy, it's easy to see the appeal of international stocks. Especially among emerging markets, continued strong growth has greatly exceeded the sluggish pace of the economic recovery among developed markets, pushing growth-oriented investors away from U.S. shores.

Yet you can also find great values internationally, as well. For instance, the turmoil in Europe has hit not just financials but companies across all sectors, creating some interesting bargains. Telecoms France Telecom (NYSE: FTE) and Telefonica (NYSE: TEF), for instance, trade at P/E multiples of 8 and 13, respectively, and each yields more than 6% while having seen double-digit declines in their stock prices over the past year. Even oil stocks Total (NYSE: TOT) and Statoil (NYSE: STO) -- which also have good valuations and dividend yields -- have seen declines, despite that the location of their corporate headquarters has little impact on their prospects or their competitive position compared to other major oil companies that have performed better.

Going against the grain
On the other hand, following the rich doesn't always make sense. Municipal bonds have been slammed, pushing shares of the iShares S&P National AMT-Free Muni Bond ETF (NYSE: MUB) down more than 5% during the past few months. Despite the fears, many munis are yielding more than comparable Treasuries despite the tax-free status that munis have. Some muni closed-end funds are trading at discounts for the first time in a long time. Even though low tax rates will continue through 2012, munis still make a lot of sense for many investors.

Also, while relatively few investors are excited about the U.S. right now, it has some compelling stocks, too. Despite all the hype among emerging markets, both the iShares FTSE China 25 (NYSE: FXI) and the iShares MSCI Brazil ETF (NYSE: EWZ) underperformed the S&P 500 in 2010, and there are many bargain U.S. stocks trading at very attractive valuations.

Get richer
Watching rich investors is interesting, but it shouldn't redefine your own investing strategy. Take hints from prevailing trends where you can, but always remember that you need to have conviction in your own investment picks in order to be comfortable holding them through the inevitable ups and downs of the markets.

Stop watching the rich and become rich yourself! Learn how by clicking here to see the Fool's special report, "The 7 Secrets to Salvage Your Retirement Today."

Fool contributor Dan Caplinger might be rich someday. He doesn't own shares of the companies mentioned in this article. France Telecom, Statoil, and Total are Motley Fool Income Investor selections. The Fool owns shares of Telefonica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy works around the world.