One important rule of investing is diversification: you should never put all your money in one basket. You need spread it in different asset classes (such as stock and obligation), and within each asset class you should diversify it further to different kind of investments.
One thing you can do to diversify your portfolio is investing abroad. Why? Because foreign markets have different characteristics than the domestic market. When the domestic market falls, foreign market could actually increase.
It’s true that due to globalization it isn’t one hundred percent true: different financial markets are linked to each other somehow. When one major market falls, the other markets tend to also fall. But at least there are some differences in these other markets that still make them good for diversification.
Just remember that you need to find a foreign market that’s more or less different than the domestic market. If they have similar characteristics, then they aren’t good candidate for diversification. European markets, for instance, are relatively similar to U.S. market. But Asian market tends to be different. So if you lived in the U.S, you might want to consider investing in an Asian market.
Of course, you need to carefully study the market before deciding to invest overseas. Make sure that the market is sound and has strong foundation. Otherwise, you might invest your money there only to get yourself into trouble. Do your homework and you can invest abroad with confidence.