Is your portfolio too All-American?
It probably is, if you are like most U.S. investors. I have been trying to include a fair sprinkling of non-U.S. stocks among my clients' investments the likes of AngloGold Ltd. (South Africa), Banco Latinoamericano de Exportaciones (Panama), Scudder New Asia Fund (primarily Japan, Hong Kong and South Korea), and Tommy Hilfiger (Hong Kong). For most clients, I strive for an international stock allocation of 10 percent to 20 percent.
To me, now is a logical time to diversify portfolios concentrated entirely or almost entirely in the United States. The U.S. market remains expensive and has shown little net gain this year. And by casting a wider net, you may be able to find some bargains.
In September of 1999 and 1998, I devoted this column to recommendations of stocks that would give U.S. investors some diversification and exposure to other markets. The ones I recommended in September 1998 rose an average of 31 percent in the following 12 months. There were seven gainers and no losers.
New report card
Last September, I recommended three new international stocks, and reaffirmed my liking for three of the ones I recommended in 1998. Here's how those six stocks have fared since that column was published a year ago (including reinvested dividends):
-Trizec Hahn Corp., a real estate development and management company based in Toronto, is down 13 percent.
-Panamerican Beverages Inc., a large bottling company for Coca-Cola Co. based in Mexico, is up 0.3 percent.
-Ace Ltd., a reinsurance company based in Bermuda, is up 84 percent.
-Banco Latinoamericano de Exportaciones SA, a Panamanian bank that finances imports and exports in Latin America, is up 23 percent. I own this stock personally and in client accounts.
-CNH Global NV, formerly New Holland NV, is a big Netherlands-based maker of farm equipment. Its stock is down 22 percent.
-Creative Technology Ltd., a Singapore-based maker of sound cards and other products for personal computers and video games, is up 117 percent.
On average, these stocks have gained 32 percent. The Standard & Poor's 500 index, a widely used measure of the U.S. stock market, gained 12 percent during the same period.
I will be surprised and pleased if I can recommend another batch of international stocks this year that gains 30 percent or more. But it will be fun to try. Here come this year's half-dozen.
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