Investing Advice

International Funds

These are mutual funds that invest in companies from around the world. Technically, if the fund is a "global" or "world" fund, then it invests in a combination of foreign and U.S. companies.

Emerging market funds invest in stocks from newly industrialized countries. Diversified emerging markets funds have never beat the average American stock fund, and are very volatile.

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:

  1. Mutual Fund Advantages
  2. History of Mutual Funds
  3. NAV
  4. Dollar Cost Averaging
  5. General advice about choosing a fund
  6. Mutual Fund Ratings
  7. Evaluating Mutual Fund Investment Risk
  8. Mutual Fund Share Classes
  9. Mutual Fund Fees
  10. The Mutual Fund Prospectus
  11. How important is the manager's length of experience?
  12. Why is the prospectus hard to understand?
  13. Mutual Fund Annual Report
  14. Comparing your fund to the competition
  15. Comparing funds on an after-tax basis
  16. Average Return on Investment
  17. How Not to Pick a Mutual Fund
  18. Cashing in Your Fund
  19. When to Sell Your Fund
  20. Mutual Funds and Asset Allocation
  21. When to get started with a mutual fund
  22. Types of Mutual Funds
  23. Value Stock Funds
  24. Growth Stock Funds
  25. Small and Micro-cap Stocks
  26. Mid Cap
  27. Large Cap Companies
  28. Income Stock Funds
  29. Mutual Fund Index
  30. Enhanced Index Funds
  31. Sector Mutual Funds
  32. Stock Market Sectors
  33. Defensive Stocks
  34. International Funds
  35. Real Estate Mutual Funds
  36. Socially Responsible Funds
  37. Balanced Funds
  38. Tax-Efficient Funds
  39. Bond Convertible Funds
  40. Junk Bond Funds
  41. Mixtures of stock types
  42. Closed End Funds
  43. Exchange Traded Funds (ETF’s)
  44. Stock Picking Strategy - Picking your own stocks?
  45. Fund names, and what they really invest in
  46. How to get started
  47. Where can I start investing with no money?

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