Investing Tax Free

Reasons for International Investing

International Investing can be beneficial to supplement your existing investments portfolios. Below are some of the reasons for international investing.

Reasons for International Investing
  • 73.9% of the total number of companies in the world are listed outside the United States – and they are not all large companies.1 International investing may be the only way to invest in them.
  • International markets have outpaced U.S. markets for the past one, three, and five years.2 If you want higher returns, you need to take a look at international investing.
  • You diversify your portfolios across the major U.S. market segments of small-cap, mid-cap, large-cap, growth, and value. Why wouldn’t you follow the same diversification strategy for their international investing?

1  Source: Factset, Worldscope July 2004
2  Source: Morgan Stanley Capital International (MSCI) indices as reported by Lipper Inc.

International Investing in Foreign stocks, household names

Despite the reasons for international investing listed above, many investors stick with domestic stocks, bonds, and mutual funds because they might feel more comfortable investing in familiar names.

However, many of the most well-known household names in the US - including the names of products you may use everyday are those of international companies.

  • Cannon cameras,
  • Bayer aspirin,
  • Dove soap,
  • Nestle chocolates, and
  • Dodge trucks

The above international brand names are just a few of the thousands of well-known products made by international companies. By ignoring reasons for international investing and by avoiding international investing and exposure to international stocks, investors are missing the chance to potentially reap the rewards of investing in many of the world's best companies.

In fact, nearly half of the stock investing opportunities in the world come from companies situated outside the US.