The U.S. Treasury reported that Americans put more money into foreign stocks in the first ten months of 2005 than ever before. Total purchases for 2005 could hit $115 billion -- far above the 2003 record of $88.6 billion. This is a trend likely to continue. Returns in the U.S. are modest, and emerging markets have grown safer and richer. A stronger dollar might slow the pace, but foreign shares already represent some 16% of U.S. portfolios and the smart money says that leaves plenty of room for further growth.

What It Means:

Foreign and emerging markets have always been viewed by investment advisors as risky, and most investors tend to shy away from them due to their complexity (which this site seeks to help reduce).  At 16% of portfolios, there is room for growth, and the growing sophistication of these markets means that the investments are safer than ever.

Action Steps:

Does your portfolio have 16% in foreign markets? If not, time to catch up with your fellow U.S. investors. If so - get ahead of the curve, and consider upping that percentage.