Global Investing: Lots of Room to Grow

Small-cap funds are a better bet today than big global stocks

We Americans tend to place ourselves at the center of the universe. So Wall Street's latest theory on foreign stocks--basically that we don't need them--may be the easiest pitch since Bogie wooed Bacall. The come-on plays to our ego and promises to simplify investing. The trouble is that like so many theories that come and go, it's based on what has been happening lately--which is anything but typical.

So don't shun foreign stocks. Instead, learn the smartest new thinking about how to play them. Modest exposure to foreign stocks--15% to 20% of a stock portfolio--can still help investors reduce risk while...

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