Overseas Markets Are on a Roll These Days

(AP) While U.S. indexes dully waver within a minuscule range, overseas markets are on fire. Japan’s Nikkei average hit its highest point since 2001 earlier this month. Britain’s FTSE 100 Index on Friday had its best close in four years. Germany’s DAX is at its highest level since 2002. Korea’s KOSPI Index is up more than 20 percent so far this year.

"People need to appreciate that global markets now are in better shape than they’ve ever been," said Linda A. Duessel, equity market strategist for Federated Investors.

No one is saying you should bet the house on overseas markets, especially given that prices are at such historic highs and returns for U.S. investors have been boosted by the weak dollar, which makes a stock’s increase in British pounds, Japanese yen or euros look even tastier once exchanged for dollars. Buying for the short term would be a bet that the markets would keep escalating and the dollar would stay weak.

For the long term, however, putting a piece of your portfolio in global stocks makes sense.

Tom Lydon, president of Global Trends Investments in Newport Beach, Calif., said Eastern Europe is booming, particularly countries like Slovakia and the Czech Republic.

"You have a great number of young, educated people who are willing to work," he said.

Automakers, including Porsche and Kia, have built plants in the region and countries such as Austria are working on the nations’ banking systems and communications systems.

Buying an Austrian Exchange Traded Fund is an easy way to participate in the Eastern European boom, Lydon said. "By buying one security, you’re basically indexing Eastern Europe."