One way to minimize your investment risk is to diversify. For example, you can spread your investments out across the five main economic sectors. This way, you minimize the chances of a big loss in your portfolio from a setback in any one sector. Another way to diversify is to invest a portion of your portfolio in international stocks.

There is no one “world stock market”. Instead, there are many stock exchanges around the world, and investing in many of them entails considerable risk. However, one simple strategy to gain international exposure, yet at the same time cut risk, is to invest in U.S. stocks.

Many blue-chip U.S. stocks have operations in multiple countries. This will let them benefit from a recovering global economy, as well as a return to prosperity in the U.S.

For a rising portfolio Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor. Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.  I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

In fact, U.S. stock markets are the closest thing to a world stock market. That’s because many foreign companies list on U.S. exchanges in order to be more accessible to North American investors.

We still advise keeping around 25-30% of your portfolio in U.S. stocks, or mutual funds that hold them. Our view is that if you stay out of the U.S. market, you risk missing out on major multi-national investment opportunities.

By holding a quarter to a third of your portfolio in U.S. stocks, we think that you can get all the foreign exposure you need. As well, the U.S. dollar and U.S. stocks could perform better than many investors expect, at least for the next six months or so. This will increase your returns.

It is also important to realize that the U.S. market offers certain investment opportunities that just aren’t available in Canada. Many industry leading multinational corporations are listed solely on U.S. stock exchanges like the NYSE or NASDAQ. We review some of these opportunities in our Wall Street Stock Forecaster newsletter.