For most of us, international investing has never been the hot and trendy thing it’s supposed to be. It might be fun to say you’re long Eastern Europe, short Brazil — and you don’t even want to talk about the Malaysian Situation or the French Dilemma — but it remains that foreign investing is hard to do. The mutual funds are expensive. Trading costs are high. And most overseas markets are far less liquid than the U.S. stock market.

Basically, you took on more risk, but got a lower return, if you invested outside the United States. Over the last 10 years, the average foreign mutual fund has trailed the average domestic equity fund by about 3.5 percent a year.

That’s not what most of us want.

In addition, you could always argue that Coca-Cola was a more foreign investment than, say, shares of Honda. Since a good portion of the earnings of many U.S. companies comes from abroad, most of us are de facto foreign investors.

Our indifference shows up in our portfolios. According to the Investment Company Institute, our collective holdings of international funds were a mere $360 billion at the end of 2002. That’s less than 14 percent of our equity assets, even less of our total financial assets. The Hewitt 401(k) Index, another measure of where most people are putting their money, recently showed that only 3.1 percent of our retirement plan money was invested overseas.

That’s too bad. The broad international indices did far better than domestic stocks last year, so almost any foreign equity holding in your portfolio would have made 2003 an even better year than it was. Fortunately, it isn’t too late — this trend is likely to last a while. Here’s why:

• Our markets don’t look any better than their markets. In the past, one reason to stay in domestic equities was the superior management, governance, accounting, and regulation of U.S. companies and the U.S. stock market. After the events of the last three years, it’s pretty difficult to say that with a straight face. We have whole closets filled with clay feet.

• It might be a shrinking world, but it’s still a lot bigger than the United States. While our stocks account for more than half of global equity value, it remains that nearly half of all global value is outside the United States. More important, the fastest growing markets, e.g. China, are outside the United States.

• The decline of the dollar makes owning overseas assets more important. This can be argued, of course. Witness the worry Europeans have over the impact of a strong euro on their exports. But with a $500 federal deficit, a large foreign trade deficit, and a government that doesn’t seem to care about its currency, owning some non-dollar assets is essential, not optional.

• Exchange Traded Funds, commonly known as ETFs, have made it a lot cheaper to invest overseas. You can now achieve global diversification in a single investment with the purchase of iShares EAFE Index (ticker EFA). That one investment, with an annual expense ratio of only 0.35 percent, will spread your money over the markets of Europe, Japan, and the Pacific Rim. There’s sure to be a pony somewhere.

How do you get started? Easy.

Visits to the following three Web sites will provide basic training: www.morningstar.com; www.ishares.com; and www.etfconnect.com.