The Informed Investor: Should You Invest Outside the US?

Investors may be comfortable with stocks from their home country—but there could be missed opportunities by not venturing across borders. It’s important to remember that you’re investing in companies, not countries. So ask yourself: Do other nations have good ideas, good processes, and good resources? Investors also may not realize that some familiar brands have ownership elsewhere. We’re comfortable buying products from outside the US—olive oil and wine are great examples—but may not have the same instincts when it comes to our investment portfolios. Even holding giant “multinational” brands in the US may not be diversifying your returns in the way a portfolio that includes foreign companies might. And if you’re emphasizing stocks with higher expected returns, like value stocks and small cap stocks, being diversified globally can broaden the universe of stocks that may outperform, while also potentially offsetting weakness in one area with strength in another. In this episode of “The Informed Investor,” Dimensional’s Mark Gochnour, Wes Crill, and Jake DeKinder argue for capturing the returns of the market whenever—and wherever—they present themselves.