Look overseas when domestic markets send mixed signals

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When the U.S. stock market is flashing mixed messages, like it has been lately, I return my attention to looking for good entry prices. Unless something has changed my fundamental view of the market, these dips are the time to buy more of the companies I like, for less. Remember, buy cheap, sell dear. 

That's what I've been doing in my SmallCapInvestor PRO portfolio. So far this year, nine of eleven positions have been closed with a gain, one greater then 140%.

In small-caps, the drop is typically greater than in large-caps, and the recent market action has born this out once again. Last week the Russell shed 2.7% while the S&P 500 only lost 0.7%. But the reverse is also true, and history has shown that small-caps consistently outperform large caps on the upside. Investors who purchased the Russell 2000 small-cap index ten years ago would have enjoyed returns around 40%, versus a 20% loss for investors in the S%P 500.

I often look to overseas markets like China and India in search of attractive small-cap investments. And why not? For its part, China just reported 8.9% Thrid Quarter growth while the U.S. has stalled. India is growing GDP growth at around 6%. 

This morning, many Asian indices were trading higher after South Korea reported excellent quarterly GDP growth. We also heard encouraging news from India's Tata Motors (NYSE:TTM). The nation's largest auto maker doubled profits on increasing sales, and the stock is responding with a 6% gain. 

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