Why invest outside the U.S.? After all, U.S. markets are stable and have shown historically strong returns over the long term. And perhaps you've decided there's enough variety in the U.S. markets to allow you to build a diversified portfolio without ever sending a dollar overseas.
Today, the globalization of the world economy is starting to change the picture. Many big domestic blue-chip companies in the U.S. are already engaged in worldwide trade, or have plans to do so. And many have major subsidiary operations in countries around the globe.
Corporations are looking outside U.S. borders to achieve the same things you want to achieve as an investor: diversification and growth. Time will show whether today's emerging markets will become tomorrow's major economic centers. Many experienced analysts predict they will help maximize returns for those who diversify investments into them. The returns can come if those new markets sustain their rapid economic growth.
Any investment entails risk. But by exposing your portfolio to investments diversified around the world today, you can spread your risk and increase your opportunities for the future.
Jeffrey Rosensweig, Goizueta Business School, Emory University
Jeffrey Rosensweig, Goizueta Business School, Emory University 