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Most American investors don't understand the rationale for investing beyond our borders.
That's not terribly shocking, when you consider the immense size and diversity of the U.S. economy, and the $22 trillion "market cap" of our stock market.
So folks simply don't feel like they "need" to look outward to build wealth; U.S. investors held almost no foreign stocks in the 1980s. That edged up to about 5% of their stock portfolios during the 1990s and has crawled up to about 15% now.
Now, that may sound like a lot, but research suggests that the correct level might be something like 30%.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.