It is not surprising that many investors choose to keep their investment strategies heavily weighted toward U.S. company stocks. For most, it seems like a much safer bet. However, investors who choose to stay in their investing comfort zone in today’s investment climate, could undermine their odds of achieving higher investment returns.
International assets offer geographic diversification and create opportunities for investors to invest in firms worldwide. Beyond the benefits of portfolio diversification and exposure to many of the world’s leading companies, there are other potential benefits to investing outside North America, including unique investment opportunities in Asia and Europe. Strong recoveries in both Europe and Asia, relative valuations, improving corporate earnings, and modest energy prices are a few of the dynamics that support the argument to invest in these regions.
In 2017, overseas markets have been outperforming U.S. stocks by a substantial margin. For the sake of comparison, the S&P 500 index has risen a healthy 9.98 percent so far in 2017. Whereas the MSCI Europe index – which measures average returns on stocks in about 15 different European markets, is up by 16.14 percent. This is the reason why some advisers are suggesting that investors venture outside their comfort zone; partially to avoid concentrating too many “eggs” in one “basket,” and partially to take advantage of the great performance of foreign markets.