IT'S BEEN ROUGH sailing recently for U.S. investors who have ventured into foreign waters hoping to find safe havens from the vagaries of their own market.

After strongly outperforming U.S. equities for the past five years, international returns have started to slip, reflecting slumping global economies, continuing fallout from the credit crunch, and high oil prices.

The MSCI EAFE (Europe, Australia and Far East) index, the benchmark used by most international funds, has declined by about 18% since May, worse than the 9% drop of the Standard & Poor's 500. Since peaking last October, the international index has plummeted by about 23%.

This stands in stark contrast to the robust growth of the global index during the past five years, when international equities returned an annualized average of 15.9% through July 31, net of dividends, compared with a 7.01% return by U.S. stocks.

So, is the boom in foreign stocks is over?

Watch on and comment