How to Invest in Foreign Markets

The world is a big place, yet relatively few people expand their investments beyond the United States. When the U.S. economy is struggling, it really makes sense to investigate foreign markets. Things are always going well somewhere!

Use these strategies to profit from growing economies worldwide:

1. Find an economy that's really hopping. Do some research and find an economy that's growing strongly. There are countless sources of economic information available for review. The internet has more information than you'll ever need; just ensure you trust the source.

• A simple measurement like the change of a country's GDP over recent history is a good starting point.

• Recent news reports of popular, growing, or successful industries in other countries can also give you some valuable information. For example, recently, there has been heightened interest in gold and silver, so you could research growing gold mining companies. New areas recently discovered by tourists can boost local economies.

• Likewise, keeping an eye on the world news can also alert you to areas you might want to avoid, such as areas that have been hard-hit by natural disasters or political uprisings. These areas' economies may be positioned for a great fall.

2. Find mutual funds that invest heavily in that country. There are mutual funds for nearly anything you can think of. It shouldn't be difficult to find a fund that focuses on the region of the world that interests you. There are countless search-engines that will help you narrow down the list of contenders.

3. Assess your risk tolerance. With investments anywhere - here or in other countries - higher returns equal higher risk. That rule stays the same regardless of where you invest. Could you afford to lose the money? If not, you may prefer more of a sure thing; the risk would be lower, but so would the return. In the end, you could come out ahead with a lower return.

• Would you like to be invested in small companies with a lot of potential for growth, but also a lot of downside risk?

• Or would you prefer to invest in large, well-established companies? (Lower risk)

• Perhaps something more like an index fund, which will closely follow the overall economy growth, is the best option for you.

• Consider your timeframe and risk comfort level.

4. Choose one or more funds for your money. Look at the track record of the funds that meet all your criteria. Be sure to dig a little - it's possible for a fund to look extremely good just because of a couple of homeruns on the part of the fund manager. Examine the returns on each of the stocks bought and sold by the fund for a real picture of the success of the fund management.

5. Watch that economy. When your foreign market economy starts to tank, the stocks will eventually follow suit, and so will your mutual fund. Keep on top of things so you can get out at the appropriate time.

Above is a simplified, but effective way to invest in foreign markets without investing a lot of time or requiring a lot of expertise. The financial world extends far beyond the United States, and you - as an intelligent and industrious investor - can take advantage of all the world has to offer.