Last week, Jason Zweig made a persuasive case for going global. Valuations are indeed attractive, but there is yet another argument to be made in favor of including international stocks in a portfolio. It revolves around both diversification and, in a way, market timing.
The diversification argument is simple. Living in a global economy as we do, I wouldn’t consider limiting my stock buying to only my home state or country, and neither should you. In fact, I’d diversify into interstellar stock markets if I could. The argument that we get enough international exposure by owning U.S. stocks which do business overseas is flawed, and gets me to my second argument, market timing.
Written By: Allen S. Roth