This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

An Isolationist Portfolio Could Be Costing You Money

Conditioned by a decade of strong U.S. growth, most investors believe they don't need foreign stocks to prosper. They're wrong.

During the 1990s, the U.S. stock market outperformed the rest of the world by a wide margin and crises in Asia and Latin America made investors wary of casting a wide net. But analysts say that wasn't normal. Indeed, for most of the 1970s and 1980s, international markets outperformed the U.S., according to Smith Barney global equity strategist Matthew Merritt.

"We would caution against viewing the 1990s as typical investment conditions," he said. "The case for broadening investment horizons across international borders is strong."

While it's possible that the U.S. will continue to beat foreign markets indefinitely, higher valuations here and an expected drop in the dollar suggest that's unlikely. Historically, the U.S. market has outperformed when the dollar has been strong, Merritt noted. So where do the best opportunities lie?

One of the most exciting places to invest right now is in Asia, according to portfolio specialist Kurt Umbarger of T. Rowe Price.

"These markets (excluding Japan) have gone through some pretty significant restructuring both at the government level but most importantly at the corporate level as a result of the very difficult economic crisis that these markets experienced back in 1997 and 1998," he said.

The initiative to clean up balance sheets and to try to reduce excess capacity coupled with a healthy rise in commodity prices, which make up a significant portion of Asian countries' GDP, paints a healthy backdrop, he noted.

Umbarger particularly likes Samsung in Korea and he's recently been buying into the Indian housing sector, citing deregulation in that area. "India is on a better economic footing with gross domestic product coming in at 8% for 2003, and we're optimistic for 2004," he said.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs