Baffled by the Global Economy? Go Local

In the past few weeks, the stock market has been shanghaied, partly by rumors of a slowdown in the Chinese economy. But it's hard enough for a New York resident to figure out what's happening in Chicago, much less Shenzhen, so it's fair to wonder if following overseas news helps investors' quest to understand their world.

Indeed, it may make more sense to shut out the world entirely and focus strictly on your own little corner of the globe. For people who live in medium and large metropolitan areas, there are more than enough companies and industries within 100 miles to help them determine how the local economy is doing. And there are probably enough public companies in that radius to create a reasonably diversified portfolio out of what they discover.

I'll give the idea of local investing a whirl by focusing today on the economy and stocks of my home state of Washington. If that sounds parochial to worldly readers in Boston and Miami, it shouldn't. ...