Investors who have embraced international stocks have been handsomely rewarded in recent years. In 2006, the international stocks delivered a 20% return, easily outpacing the S&P 500. Over the past three years, international stocks have returned nearly 10 percentage points more than U.S. stocks on an annual basis.
But these are just averages—the gains in individual markets and stocks have been even more spectacular. China rose more than 80% last year, Russia surged 55%, and Singapore was up nearly 50%. Believe it or not some stocks and ADRs did even better.
Is it risky to invest in overseas markets? To the contrary, it is even more risky to your long term financial wealth NOT to. Just listen to what legendary investor Sir John Templeton said about investing for beginners, “Investors should see the investment world as an ocean and buy where you get the most value for your money.” Investment sage Templeton's message is clear. Prudent investors must deploy their capital around the globe where the returns are the greatest.
