Trends in foreign stock markets generally do not always correlate highly with bull or bear market cycles in the U.S. stock market. While one or more foreign stock markets may at any time be moving in the same direction as its U.S. counterpart, longer-term correlations are low. This means that diversifying beyond a single market, such as the U.S., should reduce the overall volatility of your stock portfolio over time. In addition equity markets in one or more foreign countries almost always outperform U.S. stocks each year. Some American investors dismiss investments in overseas companies as risky, but they are living in yesterday's world.
Many overseas investments are more conservative than their U.S. counterparts.
Think of brand names known worldwide for investment potential. Companies such as Coca-Cola, Boeing, Disney, Ford, Citicorp, and Philip Morris are so multinational that they are not dependent on the U.S. economy, which is one of the things an investor would like to achieve. Most of these are highly speculative, but a certain small part of every portfolio should be devoted to speculation. For more information on techniques for making money in small speculative stocks, see Jim Straw's penny stock information . Putting Your IRA or Pension Plan into International Investments U.S. law requires that assets in pension plans be physically held by a trustee in the United States.