As global trade increases and the world economy becomes more integrated, it's becoming easier to invest internationally. You can buy shares in big, multinational, brand-name corporations, including some that are based in the U.S. and others that are based abroad. You can buy shares in overseas companies that are listed on U.S. exchanges, and in index funds that track the performance of various overseas markets. And you can put money into smaller, younger companies that are based overseas by investing in international or global mutual funds.
In fact, you may already have more global investments in your portfolio than you think. You may own stock in U.S. companies that have expanded their operations abroad, or that are focused on reaching customers outside the U.S. Often these are large-cap, blue-chip consumer product companies, which report that up to 80% of their profits come from business overseas. Coca-Cola is one example. And you may find that the U.S. equity or bond mutual funds you already own have a substantial portion of their portfolios invested in these multinational companies.
Jeffrey Rosensweig, Associate Dean for Corporate Relations, Goizueta Business School, Emory University
While U.S. investors choose equities when they diversify overseas, overseas investors buy U.S. fixed income securities, with a special emphasis on U.S. Treasury issues.
