Over the past year or so, asset managers, including OppenheimerFunds, have been urging investors to extend their investment horizons around the world. Unfortunately many investors appear to have equated "think globally" with "avoid the United States." For equity portfolios, doing so not only eliminates nearly a quarter of the world's actively traded stocks with over $1 billion in market capitalization, it overlooks some of the very best. So, ever mindful of the ways in which investment opportunities are expanding globally, let's look at what's happening closer to home.

If mutual fund flows provide a window into the retail investor's thinking, domestic equities are an under appreciated asset class. December 2010 was the first month in over two years that more cash flowed into equity than into fixed income funds. The trend has continued into 2011, but while an estimated $153 billion flowed into mutual funds through April of this year, domestic funds actually lost an estimated $79.9 billion. During that same four month period, foreign equity funds attracted over $51 billion. While that pattern may prove appropriate over time, as non-U.S. funds still capture less than 15%of fund holdings, investors may be chasing past returns rather than simply diversifying their risk.

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