The U.S. economy has continued to slow in 2008, and all signs point to a possible recession in the coming months. In fact, we might already be in the midst of one.

Between the mortgage mess and the credit crisis . . . record oil prices and nagging inflation . . . the budget deficit and the trade gap . . . it all adds up to a pretty strong headwind for U.S. investors. Fed Chairman Bernanke has said so himself. 

As the world's largest economy, it is virtually impossible for the U.S. to deliver the robust growth rates that it has posted in decades past. This could lead to continued losses for U.S. stocks (or sluggish, below-average returns, at best).

Fortunately, many other countries around the world are at far earlier stages on the economic development path and should deliver much higher growth rates than the U.S. for years to come. As you can see from my chart, the U.S. economy simply can't match the growth that's taking place in foreign markets.

This year may mark a "perfect storm" of negativity for the U.S. economy. But as you can see, much of the rest of the world is expected to enjoy strong economic growth. Yes, other countries are also affected by the negative trends that are hurting the U.S. -- but foreign economies are still expanding at much faster rates. This is remarkable because the U.S. is by far the world's largest economy. It has long been understood that our own levels of economic activity drive supply-and-demand calculations around the world. But the link between America's economic strength and that of the rest of the world has weakened. It used to be said that when

The global economy used to resemble a bicycle wheel with the U.S. in the middle, the fixed spokes radiating out representing our purchases and sales with all the other players. In the 21st century, it makes more sense to imagine an intricate spider's web; the U.S. remains central, but globalization allows strong but flexible strands to be woven constantly, in all directions.

What does this mean for investors? Simply that diversifying overseas is more important than in the past. When the U.S. slows, money will flow into international markets offering greater returns.

And there's another reason to invest overseas. The world is witnessing something unprecedented -- a sustained economic boom among so-called emerging markets. Again, globalization is driving this phenomenon. And because this trend is likely to last for many years, it represents a terrific investment opportunity.

China and India, the two largest countries by population, have been growing at double-digit annual rates for most of this century. Eager to catch up to the world's economic superpowers, both countries are investing tens of billions of dollars in infrastructure projects -- roads and bridges, power plants and water systems, wireless and Internet networks, even factories and cities.