Is Global Investing Worth The Risk?
With major political events (such as the Brexit) affecting the economy abroad, many investors are asking themselves “is global investing worth the risk?” On the other hand, many also cite their general unfamiliarity of foreign economies as a reason for shying away from global investing. Whatever the reason may be, you’ve probably asked yourself the same question at one point or another.
So, is global investing worth the risk? Check out our focal points that can help you decide:
Domestic stocks aren’t always the highest performers
When examining the risk of global investing, many incorrectly assume that the American stock market is always the highest performer. The truth is that nearly half of the investment opportunities in the world are outside the US, and there are likely to be occasional over-performers. In fact, in the last 12 years in a row (before 2015), the US hasn’t been the top performer.
You can reduce risk with diversification
In light of the statistics above, it’s worth noting that global investing actually has a chance to reduce risk through diversification. Although you may miss having all off of your wealth concentrated in a top market, you’ll also avoid a larger loss when that market inevitably doesn’t perform as well. A well-diversified stock portfolio with a blend of asset classes and geographies can enjoy the benefits of occasionally opposite performance and reduced risk.
Learn more about global investing
At LexION Capital, we’re globalized. We scour the investment universe to find the best investments to meet our clients’ unique financial needs and goals. In light of every clients’ appetite for risk, we craft a bespoke portfolio that can include investments across the world. If you’d like to learn more about how we can help you invest globally, don’t hesitate to contact us today.