From Financial Armageddon:

It's become something of a mantra among U.S. investors: diversify overseas to boost returns and protect assets.

In recent years, investing in foreign markets has been widely seen as a way to counter the risks associated with investing at home. These risks include the fallout from America's ongoing fiscal woes, the restructuring of an overly consumer-dependent economy, and a relentless long-term decline in the value of the dollar.

Proponents also argue that it is the only way to capitalize on "the leveling of the global economic playing field," as lesser-developed countries around the world, including high-flyers like China, India, and Brazil, play catch-up with the likes of America and Western Europe.

The truth is, however, that...

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