Thu 23 Mar 2006
Getting exposure of foreign markets
The mantra is to limit risk by also investing in foreign countries. It is possible to get some exposure with domestic stocks (here U.S. stocks).
Quote: “Another mistake is to venture into foreign funds without examining what you already have. Don’t assume, for instance, that just because you don’t own a foreign fund you don’t have exposure to foreign markets. U.S.-domiciled multinationals dominate most domestic large-cap funds and stand to prosper handsomely from growth overseas. If you own the likes of Wal-Mart Stores WMT, Citigroup C, or American International Group AIG–all of which have strong footholds overseas–you have effectively outsourced some of your foreign investment decision-making. Coca-Cola’s KO volumes in China grew 22% in 2004, for example. In other words, the world might be flatter than you think.”