Chapter 10. When Is It Safe to Drink the Water? International Investing

Investing abroad has become popular in recent years because foreign stock markets have in many cases been stronger than our own. This has especially been the case when our own currency has been weak, as it was from 2003–2005.

A certain inherent logic is involved in looking abroad for investments rather than limiting yourself to the United States. The more choices that are available to you, the better results you can obtain.

However, investing abroad also has inherent obstacles. Currency risk is added to whatever local stock market risk exists. This currency risk has no offsetting expectation of reward. Currencies have gone up and down, often without establishing a trend even ...

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