When it comes to investing, many investors tend to prefer investing in their home country. American investors tend to load up their portfolios with U.S.-based stocks and bonds, while hesitating to invest in international equity.
There is always a measure of concern when it comes to investing internationally. It is hard enough to predict how the market will behave in your own country, let alone another one on the other side of the world. However, there is value to investing in the international stock market index that could make international investments an important part of a balanced portfolio.
Three reasons to consider investing in the international stock market
- U.S. equities will not always be on top — The U.S. market had a great 11-year bull market period, but this came to an end in March 2020. The end of this bull period is largely in part due to COVID-19, but bull periods always come to an end eventually.
When the market is bearing in the U.S., it could be performing well elsewhere. Having investments in other countries with healthy markets can help keep your investment growth healthy.
- International investments offer more diversification — Even when the U.S. market is stable and bulling, it is wise to have some of your assets consist of international stocks. Whether short-term or long-term, international stocks help diversity your portfolio, which helps you keep your savings and wealth growing at a stable rate.
- The exchange rate can be beneficial — If you are investing internationally in a market where the country has a stronger currency than the U.S. dollar, you have the opportunity to benefit from higher growth.
Talk to a ProVise CFP® professional about your investment strategy
Investing in international markets is always a personal choice. You should talk to a financial professional about the benefits of investing in international markets and whether it will be right for helping with your portfolio.
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about managing your investments? Contact ProVise today to schedule a complimentary consultation.