But recently, this academic advice has lost its luster. Latin America's stock markets dropped by a comparable amount in early 1998.
Corporate accounting is opaque in many overseas markets, and insider dealing is rampant.
Still, even a cursory reading of financial history indicates the danger of chasing recent performance with speculative abandon. Remember, a mere decade ago, mortgage-interest rates were in the double digits, Japan was the world's economic juggernaut, and the U.S. was widely considered a declining power. Fact is, now's a good time to expand your investment horizon. The global economy is picking up. The only major economy that will struggle badly is Japan's.