U.S. Stock Buying Vs. Foreign Stock Buying
World stock market values (market capitalization) are rapidly changing and present numerous opportunities for international investment. Until shortly after 1800, global GDP (gross domestic product) and commerce appeared relatively stable and consistently distributed. With the rapid rise of the United States as an economic powerhouse, distribution of output shifted remarkably, and many economies experienced greatly reduced business output. This balance of output continues to change as new economies emerge.
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U.S. Market
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In North America, the U.S. stock market developed from the rapid expansion of business in the 1800s, and by the early 1900s had become the largest market in the world.
Mature Markets
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Business output in Asia, Western Europe, Latin America and India were stable until around 1800. Markets in China and India contracted with the U.S. market's rise. As of 2010, India and China had begun to experience solid growth again.
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Developing Markets
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Many relatively unrecognized countries have been in the remainder of GDP, which has remained somewhat unchanged, but areas such as the Middle East, some South American countries, Eastern Europe and others have markets undergoing incredible growth as of 2010.
Considerations
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Conventional thought is that when U.S. stock markets move one way, foreign markets move the other. This is becoming less true, likely because of rapid transfer of information.
Exposure
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It is not necessary to go to foreign exchanges to gain exposure. Many overseas stocks trade on U.S. exchanges, many U.S. companies have significant international business exposure, and there are thousands of mutual funds that invest internationally as well.
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