Because of the recent compelling reasons to invest globally, we have made a strong push in that direction. Rather than attempt to set up accounts at exchanges and brokerages all over the world, however, I tend to favor ADRs since they are a convenient way for U.S. investors to invest in international companies -- an otherwise complicated process. It is especially good to know that ADRs are traded in accordance with U.S. market regulations, so any dividend payments as well as any corporate action notification will be timely. ADRs are also convenient because they're quoted and traded in U.S. dollars on the U.S. securities markets: NYSE, AMEX, and even NASDAQ. Each ADR is backed up by a specific number or fraction of shares in the foreign company. The relationship between the number of ADRs and the number of foreign shares is often referred to as the ADR ratio. I find that using this way of investing allows me to avoid worries over the different regulations and currency fluctuations of the various markets around the globe.

There are close to 300 ADRs in our universe and I find that around 25 to 30 of them at any given time are strong growth opportunities. We diversify, of course, with a tendency to lean toward the larger countries and companies. We like the fact that many of these stocks are very conservative and often have large government ownership, which helps increase the feel-good and sleep-well factor of global investing. We also sprinkle money across some of the emerging markets as they can be like rocket ships when they perform well. We keep that portion small so that we can benefit nicely when they blast off but not get hurt when they fall back to earth. They are volatile, and we try to make that volatility work for us and not against us. We also make it a point to avoid countries that we see as anti-capitalist in their foreign and financial policies. Venezuela under Hugo Chavez comes to mind as a prime example of a place we will not invest because of this reason.

Why do we invest globally? Because it increases the number of opportunities available to us and because it works. The value bias of most international investors and the continuing enormous flows of cash toward non-U.S. markets combine to offer an incredible opportunity to growth investors. The information needed to analyze and invest in these markets is as available as is information on our favorite U.S. stocks. It's a whole new world out there and we think we should be a part of it and take advantage of all the growth opportunities ahead around the world. Billions of people will need new homes, roads, and infrastructures over the next 50 years. Billions of new consumers will want all the fancy goods and toys that western consumers have long taken for granted. There are huge new marketplaces out there, and as growth investors we can benefit as they develop.

Copyright © 2007 Louis Navellier

The above is an excerpt from the book The Little Book That Makes You Rich by Louis Navellier Published by Wiley & Sons, Inc.; October 2007;$19.95US/$23.99CAN; 978-0-470-13772-7 Copyright © 2007 Louis Navellier

Louis Navellier has one of the most exceptional long-term track records of any financial newsletter editor in America. As a financial analyst and editor of investment newsletters since 1980, Navellier's recommendations (published in Emerging Growth) have gained over 4,806% in the last twenty-two years, as confirmed by a leading independent newsletter rating service, The Hulbert Financial Digest. Emerging Growth is one of Navellier's four market-beating services, which also include his Blue Chip Growth service for large-cap stock investors, his Quantum Growth service for active traders seeking shorter-term gains, and his Global Growth service for active traders focused on powerful international stocks.

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