New Year's Resolution? Dump Domestic Losers and Buy High-Dividend Foreign Stocks

Most U.S. investors have low exposure to foreign stocks. Despite the rising importance of foreign countries in the global economy, many investors have the “home-bias” problem and continue to gravitate towards American companies. While it is true that a quarter of the revenues of the S&P 500 firms come from abroad, in order to gain full exposure to foreign investors, investors have to jump into foreign stocks. In addition, domestic companies in foreign countries know the local market, culture, traditions, etc. and hence have an edge over US firms. Unlike the US, many countries are projected to have stronger economic growth next year and in the future. Hence investors may want to review their portfolios now and change their asset allocations to better position themselves and profit from growth overseas. There are many advantages in owning foreign stocks. One of them is high dividend payouts. Foreign companies generally pay much higher dividends than US companies. One way to identify some foreign stocks is to select stocks that pay high dividends. Investors can use the following list of high dividend-paying US-traded foreign stocks as a starting point for further research. As 2010 is coming to an end this is also a good time to dump some of the losers in the portfolio and add high-quality foreign stocks.... Read more