{"id":9671,"date":"2021-06-25T13:24:55","date_gmt":"2021-06-25T13:24:55","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9671"},"modified":"2022-02-26T13:05:52","modified_gmt":"2022-02-26T13:05:52","slug":"is-now-a-good-time-to-invest-in-foreign-markets","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/is-now-a-good-time-to-invest-in-foreign-markets\/","title":{"rendered":"Is Now a Good Time to Invest in Foreign Markets?"},"content":{"rendered":"\n

Kristen C. from Charleston, SC asks: <\/em>Good Afternoon\nMitch, I\u2019m writing to hear your thoughts about international investing at the\ncurrent moment. I know the pandemic is still a major issue in many developing\ncountries, and vaccine distribution is nowhere near where it is in the U.S.\nCurious to hear your thoughts on the global economic recovery and whether now\nis a good time to have an international allocation.<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for emailing your question, Kristen. I have not had a\nreader ask about foreign investing in quite some time, and it\u2019s a great topic\nto revisit. <\/p>\n\n\n\n

The short answer to your question is yes <\/em>\u2013 there are\nmany growth opportunities outside the U.S., particularly as we observe a\n\u2018rolling\u2019 global economic reopening that started in Southeast Asia (mainly in\nChina), moved to the U.S. in the last few months, and eventually will land in\nEurope and make its way to developing economies as well.<\/p>\n\n\n\n

Looking back over the last 2- and 5-year periods, you will\nfind that the S&P 500 index has fairly widely outperformed the MSCI All\nCountry World Index ex-US, and as it stands today global stocks are undervalued\nrelative to US stocks1<\/sup>, in my view. This alone may drive some performance\nmean reversion looking ahead.<\/p>\n\n\n\n

__________________________________________________________________________<\/p>\n\n\n\n

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__________________________________________________________________________<\/p>\n\n\n\n

I also find that many investors have what is called \u2018home\ncountry bias,\u2019 meaning they tend to over-allocate to the U.S. and\nunder-allocate abroad. An investor\u2019s level of exposure to international\nequities should correspond with their risk tolerance and desire for long-term\ngrowth, which for many investors may mean not having enough international\nexposure.  <\/p>\n\n\n\n

When I look out at the global economy, I see a lot of\ndifferent opportunities for growth and value creation. Governments across the\nworld appear to be posturing for additional spending in infrastructure\nbuild-outs, particularly in the realm of energy and climate-related projects.\nThis push could drive demand for raw materials and building materials. <\/p>\n\n\n\n

There is also, of course, the technology sector, which many\ninvestors may mistakenly believe is limited to the U.S. and China. There are\nmany overlooked opportunities in Europe, Japan, and Emerging Markets\nparticularly as it relates to supply chains. Several other sectors and\nindustries are worth eyeing right now as well, such as tourism, travel,\ne-commerce, and digital payments (just to name a few). Spending and investment\nare not just limited to the U.S.<\/p>\n\n\n\n

As it stands today, Kristen, flows into global equities have\nbeen robust over the past few months, and some of the recovery is likely priced\ninto markets. But for long-term investors, I think international growth\nopportunities will continue to exist, and depending on your risk tolerance and\ndesire for growth, it could make sense to maintain an allocation to\ninternational stocks as part of a diversified portfolio.  <\/p>\n\n\n\n

In a very\nvolatile market, feeling uncertain about your investing decisions is natural. But\nwith the right research, you will be able to better navigate through these\ndecisions. We recommend never selling off emotions or waiting on the\nsidelines out of fear. <\/p>\n\n\n\n

Instead, we have put together a free Black Swan Investing\nPlaybook<\/em>3<\/sup> with insights and guidance to help you seek success\nwhen investing through these unprecedented times. If you have $500,000 or more\nto invest, get our free investing playbook today. You\u2019ll learn about seven\ntime-tested guidelines to help you seek investing success through any \u201cBlack\nSwan\u201d market downturn.<\/p>\n","protected":false},"excerpt":{"rendered":"

Mitch looks at the risks and opportunities of investing outside the U.S. as the rest of the world prepares to re-open<\/p>\n","protected":false},"author":3,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-9671","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9671"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9671\/revisions"}],"predecessor-version":[{"id":10369,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9671\/revisions\/10369"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}