Tuesday, May 12, 2009

The World is Bigger than Canada and the U.S.

I have been extremely fortunate this year. My employer has posted my in Norway, away from my home in Canada and it has given my family and I the most amazing opportunity to travel easily throughout Europe. As I write this, I am sitting in the Barcelona airport awaiting our flight home after a weeks cruise up the coast of Italy and France. As usual, I have thought of the linkages of this trip to my investment plans and have confirmed something I have always know.

Simply put, there is a whole other world outside of the U.S. and Canada with large well developed markets with large well established companies. As such, I am more convinced now more that ever that I need to have maximum international diversification in my portfolio. Without that, I would be missing out on massive markets and massive companies spread out across the world.

I am not talking about the Coca-Cola's and McDonald's or the world. These companies seem to be everywhere, especially Coca-Cola which is one reason I own it. I am talking about other large companies such as Popular which is a well know dividend paying Spanish bank. There are telecommunications companies, airlines, vacation and travel companies, clothing companies, technology companies to name a few. If I invested only in the U.S. and Canada I would be missing out on these markets.

To invest internationally, I do not invest in individual stocks. Instead, I use international index ETFs to do the work for me. I am not close enough or have enough time to keep track of these companies from afar. Index ETFs work very well for me and give me access to these markets in a cheap and easy fashion. In my opinion, based on what I have seen directly, if you are investing in only U.S. and Canadian stocks then you are missing out on huge markets with great growth potential.

This article was written by The Dividend Guy. You may email questions or comments to me at info@thedividendguyblog.com.

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