The rise of globalized markets has forced everyone to
become a global investor. If you're nervous about putting
your money to work overseas, though, there are several ways
you can ease yourself into international stock markets
without feeling like you're getting in over your head.
Reaching out for higher profits
Lately, the U.S. economy has fallen on hard times.
Unemployment is pushing double-digit levels, and jobs are
stillbeing lost each month. The biggest contributors
to growth in the country's
gross domestic productlast quarter were various
government stimulus programs, including Cash for Clunkers and
the tax credit for first-time homebuyers.
The impact of the problems the U.S. has faced recently has
been felt around the world. But many countries, including
emerging-market economieslike China and Brazil, have
managed to sustain strong economic growth despite the
headwinds created by the global recession. Moreover, their
stock markets have seen huge successes recently. China's
Baidu (Nasdaq: BIDU) and
Netease.com have both seen explosive growth
from March's lows, as have Brazilian giants
Petroleo Brasileiro and
Vale (NYSE: VALE).
Fear of flying
With the U.S. economy facing a questionable future
while other countries around the world continue to leap
ahead,
you can't affordto keep your money close to home. But
many investors are understandably nervous about investing
abroad. Unlike investing in the U.S., foreign stocks don't
automatically give you the same protection that entities like
the SEC provide you here at home.
Moreover, many countries around the world don't have the
same well-established
commitment to capitalismthat you find among developed
countries. That can raise concerns of extraordinary events
like
nationalizationof key industries and government
confiscation of assets, which can cost you your entire
investment.
That's why you might not want to jump into international
stocks all at once. To give you a sense of what it takes to
be a global investor, try out these three pieces of
advice.
1. Let your stocks travel for you.
To be part of the global economy, you don't have to
take a penny of your own money overseas. Plenty of
well-established U.S. companies earn a huge portion of their
overall revenue from abroad. Here are some examples:
Company
Share of Revenue From Overseas
Pepsico (NYSE: PEP)
48%
Yum! Brands (NYSE: YUM)
55%
Baker Hughes
62%
Monsanto (NYSE: MON)
45%
Cisco Systems (Nasdaq: CSCO)
46%*
Sun Microsystems
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