It has become conventional wisdom that you should invest a portion of your stock portfolio overseas. But USA Today's John Waggoner isn't so sure.

"The problem with international investing is twofold," he writes. "First, it adds currency risk to the equation."

If you invest in a foreign stock fund, the dollar's fluctuation will affect its value unless the fund manager hedges currency risk. When the dollar falls, the value of your fund rises, because the foreign currency in which the manager invests is now worth more dollars.

But when the dollar rises, as it has in recent months, to multi-year highs, the value of your fund falls. That's because the foreign currency in which the fund manager invests is now worth less dollars.

"For example, the German stock market has soared 14.3 percent this year, according to MSCI. Translate that into U.S. dollars and the gain falls nearly in half, to 7.3 percent," Waggoner notes.

The other issue is that foreign stocks have lagged the U.S. market for the past five, 10 and 20 years, Waggoner argues. The S&P 500 index has climbed 518 percent in the last two decades, compared with 201 percent for the MSCI Europe, Australasia and Far East index (EAFE).

"You can live a long and happy investment life without sending your money abroad," he adds. "But if you do, a global fund might be the best way to do it."

When it comes to general investing, all of us have our emotional and intellectual weaknesses, and it's important not to let them get in the way of our investment activity.

Morgan Housel, a columnist at the Motley Fool, cites several pitfalls to avoid in The Wall Street Journal.

• "Feeling certain." If you start thinking that you know for sure what's going to happen to a financial market or individual security, get yourself in check, he writes. "There are no certainties in markets, only probabilities."
• "Extrapolating the recent past into the future." Just because a financial market or individual stock or bond has performed a certain way in the past few weeks doesn't mean it will continue to do so. "The easiest, and often most common, forecast is to assume the future will resemble the recent past," Housel says.
• "Impatience. Investing requires, more than anything, patience and discipline. But it often attracts the impatient and impulsive." When you engage in short-term trading, you risk racking up big losses and missing out on long-term gains.

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