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Lipper

Worldwide investing pays off

- Alan Lavine and Gail Liberman



It pays to keep it simple when investing in mutual funds.

Some say all you need is a money fund, bond fund and a world stock fund. World stock funds, also known as global stock funds, invest overseas and in the United States. So you should get diversification automatically.

Last year, world stock funds gained 11.24 percent while U.S. stock funds gained just 5.5 percent.

There is no free lunch with world stock funds. For example:

- You are relying on the fund manager to pick the right stocks, as well as right countries.

- There is foreign currency risk when you invest overseas. If the value of the dollar increases against foreign currencies, your investment could decline.

- You're subject to political and economic risk--particularly when you invest in emerging markets, like Latin America, Eastern Europe and Asia.

- World funds also tend to have higher expenses.

Here are some of the best-rated world funds according to Morningstar Inc., Chicago:

  • American Funds Capital World Fund
  • BlackRock Global Growth
  • DWS Global Thematic
  • Fidelity Worldwide
  • Oakmark Global
  • T. Rowe Price Global
  • Templeton Global Opportunity
  • Vanguard Global Equity

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Spouses Gail Liberman and Alan Lavine are syndicated columnists. You can purchase Alan Lavine & Gail Liberman's latest book Quick Steps to Financial Stability (QUE Publishing 2006) online at www.moneycouple.com or at your local bookstore. E-mail them at MWliblav@aol.com.


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