Diversification

One of the biggest advantages to international investing is diversification. By placing your money in U.S stocks, bonds and real estate, you are essentially investing in the United States. While many U.S. companies sell products and services to businesses in other countries, you are still keeping your investment dollars localized to the United States. By investing directly in stocks, bonds and real estate overseas, you are diversifying your risk. If United States has a sluggish economy for a few years, but other parts of the world are on fire with economic growth, you can boost your investment returns. Conversely, if that paradigm switches, you can stabilize your international returns by investing in the U.S. economy. In this manner diversification spreads risk.

Rate of Return

References

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