I had a call on my Sunday morning show a few weeks ago from a woman who wanted to know how to get started investing in foreign companies. I told her the easiest way to do it, and the way I do it, is through international index funds.
An International index fund is a regular index mutual fund with a foreign accent. So you might have a Japan index fund or an Asia fund or an India fund. Or, you might choose an emerging markets fund.
All of the big financial companies offer a variety of international index funds. The cost varies, so pay attention to the fine print. You might also look at international ETFs – that’s Exchange Traded Funds, which act a little more like stocks and a little less like a mutual fund.
While simply buying an international index fund will help diversify your portfolio, you can diversify further by purchasing several different international funds. Exposure to China, Europe and Latin America is safer than simply buying into one part of the world. To compare funds, check out Morningstar.com.
With practical, informative consumer advice, I’m Ilyce Glink, News-Talk 750 WSB