The Three Myths of Global Investing
It’s easy now to walk into a store and buy products from anywhere in the world. But when it comes to global investing, many people still hesitate. Despite the dramatic opening of borders in recent decades, many U.S. investors still face psychological and logistical barriers.
Myth One: Global Investing is Riskier than U.S. Investing
Fact: Global diversification tends to lower the risk of a U.S-only portfolio. Historically global investing has provided higher returns at all risk levels than U.S.-only investing.
Myth Two: Investors Now Have Sufficient Global Diversification
Fact: Most investors exhibit a home bias, a natural tendency to be more comfortable in their local markets than they are in less familiar economies. As a result, many investors have too little money invested in other economies and too much in their own.
Myth Three: It’s only profitable to invest in foreign markets if you are a foreigner
Fact: The returns on foreign equities and bonds for U.S. investors have far exceeded the returns for local investors over the past few years.
Countering Home Bias
Global funds help simplify a truly worldwide approach to investing by combining U.S. and overseas investments into one - just like your own buying decisions.