In periods of slow economic growth, such as the current recession in the US, investors may want to focus on American companies as a way of helping the economy. While investment in American companies will have the long-term effect of helping the economy, investors may also want to look elsewhere for ways to stabilize their portfolios and to minimize some of their losses.

The recession has resulted in restrictions on lending and reduced credit. Without access to credit, businesses can’t expand and consumers reduce their spending. This domino effect means that economic recovery is even slower, as consumers do not create the demand necessary for businesses to produce more.

Banking and housing are the two industries that have been hit the hardest, resulting in higher unemployment and investment losses. As unemployment continues to rise, banking and housing continue to remain flat and consumers lose confidence. Those who have invested in these sectors have taken hits to their portfolios as well as retirement funds and 401(k) accounts.

In order to be able to ride out these investment lows, it can be helpful to invest in areas that have not been affected by the US recession. International markets that do not rely heavily on the state of the American economy can balance a portfolio and provide stability and growth. Many have continued to grow despite the economic climate of the United States and the aftermath of the financial meltdown. Other countries have also experienced economic slowdowns, but many international markets continue to thrive because they are further from the center of the economic crisis. These markets can provide opportunities to realize profits even in the poor economy, because they are not closely tied to the US banking or housing industries and are unaffected by American unemployment. International markets can provide a cushion against these recession-based losses.