International investing is a strategy that involves selecting global investment instruments as part of an investment portfolio.
Some believe that investing in international funds increases your diversification, thus lowering your risk.
You can invest in both stocks and bonds internationally. Developed and emerging international markets have different levels of risk and potential return.
Two of the chief reasons why people invest in international investments and investments with international exposure are:
Diversification. International investing may help U.S. investors to spread their investment risk among foreign companies and markets in addition to U.S. companies and markets.
Growth. International investing takes advantage of the potential for growth in some foreign economies, particularly in emerging markets.
But there are special risks of international investing. For example, international investing can be more expensive than investing in U.S. companies.
When the exchange rate between the U.S. dollar and the currency of an international investment changes, it can increase or reduce your investment return.
In addition, it is difficult for investors to understand all the political, economic, and social factors that influence markets, especially those abroad.
In this video, Jack Bogle gave his reason why he did not like investing in the international stock markets.
Warning: This video is to show you John Bogle’s view about international funds investment. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.
