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Global Investigation of Business Economy

July 22, 2007


Around the World, With Borderless Investing



THANKS to hot markets in Europe, Asia, and Latin America — as well as the surprisingly strong global economy —

the idea of investing abroad is no longer foreign to many investors. In fact, for the typical retirement plan investor,

the stake in foreign equities has more than tripled over the past five years.

But in addition to investing internationally, have you considered investing globally? There’s a difference.


Since 2003, when foreign stocks came into vogue, the bulk of mutual fund investors used a foreign-only approach to

buying them. In other words, investors who already had meaningful domestic exposure have been putting new

money to work in separate portfolios dedicated to overseas stocks. And the two sides of their investment strategy —

the domestic portion and the foreign allocation — generally operate independently.

But with globalization upon us, some people wonder whether it’s time to stop segmenting investment portfolios

along regional lines.


After all, with the exception of parts of Asia and the emerging markets, global stocks are moving much more in sync

with domestic equities than they did a decade ago. “As things have gotten more globally correlated, sectors have

become almost more significant than regions,” said Tim Hayes, chief investment strategist at Ned Davis Research in

Venice, Fla.