While it is true that the United States is by far the 800 pound gorilla in terms of the size of its economy and its market capitalization, there are many countries who are experiencing growth that dwarfs that of the U.S. China now ranks second in terms of market capitalization, followed by Japan, Britain, France, India, Russia and Brazil. The increases in stock market capitalization of these countries reflect the higher rates of economic growth that has taken place over the past ten years.

Economic growth in the BRIC countries (Brazil, Russia, India and China) far surpasses that of the other developed countries. From 2004 - 2008, real gross domestic product growth averaged 3.5% in Brazil, 7% in Russia, 8.9% in India and a whopping 10.8% in China. Contrast that with growth in the U.S., which managed a meager 1.8% over the same period. Although investing in these emerging markets carries more risk than investing in U.S. securities, their potential for increasing returns in your portfolio cannot be ignored.

Capitalism has spread like wildfire since Japan, Korea and South Vietnam embraced it more than twenty years ago. China has been late to the party, but this is, in part, due to its sheer size in terms of its population and the fact that its economy has historically been a sizable agrarian-based one. Moving hundreds of millions into the urban cities overnight was logistically impossible. But China has systematically done just that since the early 1990s and continues to move millions more each year into these capitalistic urban enclaves that have been responsible for China's dramatic growth in manufacturing and exports.

How To Invest in International Companies?
International investing allows you to buy shares of some the largest and fastest growing companies in the world. Such investing only has value as long as the investor has a long-term investment time horizon and is willing to shoulder the associated risks. There are many ways to invest internationally. There are international mutual funds that include many blue chip international companies. There are also index mutual funds, which attempt to replicate the returns achieved by a market index, such as the S&P 500 in the U.S. or the MSCI EAFE international index. There are exchange traded funds (ETFs), which offer an alternative to mutual funds. ETFs trade on a stock exchange just like traditional stocks, but really represent a basket of stocks in companies tracked by a particular index. The advantage of ETFs over index mutual funds is their lower costs and fees as well as the ease with which an investor can buy and sell at any time during the day, unlike mutual funds which are liquidated once a day.