For example, Russia funds were at the top of the emerging markets list in 1997 with a 98% gain, but
then lost 85% in 1999. $10,000 invested would have turned into $2,970 (10,000 plus 98% less 85%).
Who would have invested in Korea in 1998, after seeing Korea funds lose 70% in 1997? But they
gained 99% in 1998, and then crashed again in 1999 and 2000.
There are also Regional Funds that invest in companies of a specific continent, country, or
region of the world such as Russia, Latin America, or the Pacific Rim.
Looking at the top 25 international funds of 1998-1999, only 2 made money in 2000, one 8% and the
other 2%.
Historical performance has shown that putting part of a diversified portfolio into international
mutual funds does not provide a higher return on your investment, but certainly does create more
risk. You can lose a lot of money because of something as simple as currency devaluation. You are
not missing out if you skip them.
Other Stock Market Basics Topics:
-
Mutual Fund Advantages
- History of Mutual Funds
- NAV
- Dollar Cost Averaging
- General advice about choosing a fund
- Mutual Fund Ratings
- Evaluating Mutual Fund Investment Risk
- Mutual Fund Share Classes
- Mutual Fund Fees
- The Mutual Fund Prospectus
- How important is the manager's length of experience?
- Why is the prospectus hard to understand?
- Mutual Fund Annual Report
- Comparing your fund to the competition
- Comparing funds on an after-tax basis
- Average Return on Investment
- How Not to Pick a Mutual Fund
- Cashing in Your Fund
- When to Sell Your Fund
- Mutual Funds and Asset Allocation
- When to get started with a mutual fund
- Types of Mutual Funds
- Value Stock Funds
- Growth Stock Funds
- Small and Micro-cap Stocks
- Mid Cap
- Large Cap Companies
- Income Stock Funds
- Mutual Fund Index
- Enhanced Index Funds
- Sector Mutual Funds
- Stock Market Sectors
- Defensive Stocks
- International Funds
- Real Estate Mutual Funds
- Socially Responsible Funds
- Balanced Funds
- Tax-Efficient Funds
- Bond Convertible Funds
- Junk Bond Funds
- Mixtures of stock types
- Closed End Funds
- Exchange Traded Funds (ETF’s)
- Stock Picking Strategy - Picking your own stocks?
- Fund names, and what they really invest in
- How to get started
- Where can I start investing with no money?
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