International Finance Investing Globally

Why Invest Internationally? Diversification Markets in different countries are not perfectly correlated Benefit to diversification Foreign markets have more growth potential Hedge against declining $

International Diversification Reduces Risk 100% Foreign E(R) 50% Foreign 80% U.S. 90% U.S. 100% U.S. 

How to Invest Internationally Direct purchase of foreign stocks ADRs Invest in MNC stocks ETFs International mutual funds

Factors Affecting International Investments Taxes Local tax rate on interest and dividends U.S. treatment of foreign investment income Interest rates Exchange rates