Investors in the U.S. are still under-allocated in global stocks. Christine Benz of Morningstar does a great job of busting the myth that Foreign-Stock Funds Are Riskier than U.S. Funds.
"Of all of the investing myths I discussed in my last column, the one about sticking with a foreign-stock weighting of 15% to 25% of your equity portfolio seemed to resonate the most with readers. Many of you told me that you’ve been staking far more in foreign markets than conventional wisdom would suggest, and the past few years have shown the merits of that tack. If you’re not ready to invest a substantial portion of your portfolio overseas, maybe it’s because you perceive the risks to be greater in foreign markets. Yet the data tell a different story. Over the past 10 years, the standard deviation (a measure of volatility) of the typical foreign large-value fund is right in line with the average for domestic large-value funds (often considered to be the least risky U.S. stock-fund category). That pattern holds true for most other diversified foreign-stock categories and their U.S.-based counterparts."
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