Go Global for Diversifcation That Travels Well

US-based investors may believe they know America best. Accordingly, they are liable to put the bulk of their investments in stocks and bonds of US-based companies and in US federal and municipal fxed income securities. Given the size and relative safety of this market, that may seem a sound approach. Yet this strategy has some holes. “Home bias”1 can limit your investment opportunities and constrain your ability to beneft from diversifcation.

Consider these revealing numbers:

The US stock market is the biggest in the world,2 but stocks stocks of the roughly 18,500 companies trading outside the US represent nearly 40% of the world’s $88 trillion equity market (see Exhibit 1)

Click here to continue.