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Economic Growth Forecasts Augur Offshore Exposure

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A recent slump in U.S. growth rates has started to spook investors again, prompting domestic indices to fall precipitously on Monday.  Although I believe such market action is short- to medium-term, the differential between growth rates here and abroad should be considered.

According to the World Bank, developing economies will experience a growth rate of nearly five times our own.  Although roughly one-half of all S&P 500 company revenues are from international operations, it still makes sense to earmark a portion of one’s equity portfolio to emerging markets.  Even though volatility in these investments will likely be substantial, there is a good long-term case for investing directly outside the U.S.