As an investor, you may not want to have all of your eggs in the U.S. basket. Among other reasons, the dollar may weaken, in which case the stocks of foreign countries are likely to appreciate as their currencies move up in value.
China and India are poised for growth while the European Union seems to have problems. Many investors will put their money into a world stock fund and let the manager pick the best companies. However, you might want to look and see if the manager has a history of investing in the high-growth areas of Asia.
One possible approach is to combine Vanguard International Growth Fund with Tweedy, Browne Global Value Fund. Not only does this mix growth and value holdings, the former is a large-cap fund that does not hedge currency risk while the latter invests in smaller companies and hedges in order to protect U.S. investors from a weak dollar. This strategy can provide more diversification for your overseas holdings.
Your international allocations might include international small-cap and emerging markets funds as well. On the other hand, if you have a relatively small portfolio that has room for just one foreign fund, consider Vanguard Total International Stock Index Fund, which combines European, Pacific, and emerging markets indexes.
