Just a quick point. Despite the impressive performance of the US equities markets in 2006, after adjusting for currency losses the S&P 500 was only up 1.6% last year in Euro terms. Given that the British Pound just hit $2 for the first time in about 2 decades, I'm sure that the Euro is not an outlier.

So what to do? I'm not feeling completely confident about US equities on the whole, but pulling out of the market exposes me to both inflation and currency devaluation. Looks like international is the way to go. I suppose I'm just as guilty of home bias as the next investor, although I do believe there is some degree of advantage in investing in one's home country - quite simply, I have a better idea of the legal, social, and economic framework that exists in the US than, say, Japan. Nonetheless, I definitely think there are times when one must look beyond perceived advantages and execute on behalf of a larger global strategy.

Since I don't really have the insight necessary to pick undervalued, underfollowed foreign equities, I'm going to have to defer to the markets as a whole and go for ETFs. As for what countries to actually invest in, that will take plenty of analysis and thought, although I'll say right now I'm leaning towards Japan...