Returns on international stocks have pounded those of their domestic counterparts over the past several years. Generally, you can count on dumb money to follow those returns, especially after a long period of out performance.

Most investors perceive international investing as riskier than putting their money in domestic stock markets. Even though economic growth in the U.S. has slowed significantly in recent quarters, investors who choose domestic companies can count on higher levels of disclosure and regulation than they’ll find in many other countries, especially among emerging markets such as those of Brazil, Russia, India, and China. In addition, many large American companies, including ExxonMobil and Altria, earn a large fraction of their revenues from international operations. You don’t have to go beyond the borders of the S&P 500 to get some international exposure.

Yet macroeconomic factors are pushing investors away from American shores. The falling dollar, which recently hit all-time lows against the Euro and breached the $2 mark against the British pound, has made some foreign investors leery of currency losses that have resulted from investing in the United States. In addition, better economic growth prospects in Europe and the emerging markets make their stocks more attractive than U.S. stocks. Investors are even starting to get back into larger Asian markets such as Japan and Singapore; the average global asset-allocation fund has doubled its exposure to Asia over the past five years.

If you’re content with average returns, then staying inside the U.S. for your investments should give you reasonable results over the long haul. But to find the best opportunities for growth, you have to start looking around the world. From an investment perspective, putting some international investments in your portfolio helps to increase your potential for growth while also leaving you less dependent on the continuing success of the American economy. Yet as the 9% drop in the Shanghai markets in early February shows, these markets aren’t for the meek. Although past periods of similar out performance have often been followed by abrupt corrections and longer declines in international markets, long-term investors can afford to ride out the bumps in the road to reap higher returns.

As the economy becomes more global in scope, investors are following suit. At Odyssey Advisors our clients’ portfolios are globally diversified. It is one of our core philosophies that global investment, if done properly, can not only enhance returns but reduce risk. There are many ways to expose your portfolio to international markets, and many of them can be costly both from an expense and tax perspective. To invest the right way internationally – Leave your investment strategy to us.

Odyssey Equity returns are calculated on a Total Return Basis and are presented net of all fees. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance changes over time and currently may be lower or higher than the performance data quoted above.

Mark Collard authored the above article.

Mark Collard is a Partner in the investment management firm, Odyssey Advisors, LLC. Collard received a BS in Business Finance and Accounting, Cum Laude from Saint Vincent College and an Executive MBA from the State University of New York at Buffalo.