Having an international component, assuming it is diversified, can expose your portfolio to investment markets that may have greater growth potential than U.S. markets during various periods of time. Also, at various times, the same types of companies in international markets may be selling at lower price/earnings (PE) ratios than in the U.S. market. International securities diversify some of the overall investment risk from investing in the U.S. stock market alone.
What percentage you should have in international investments should be decided by consulting an investment adviser. Key factors will include your investment risk tolerance level and the amount of money available to invest. If funds are limited, you can purchase a diversified portfolio of international securities through an international mutual fund or exchange traded funds.
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