Why is it important to invest some of my portfolio outside the U.S.? Aren’t those markets riskier?
We understand US stocks have performed incredibly well relative to other geographies in recent years. But that’s precisely why we recommend investors not overweight U.S. Stocks. International stocks represent more than 60% of global stock market value.
What’s more, over-concentrating your portfolio in one geography can work in the short term, but it’s the equivalent of market timing, which academic research has consistently shown is next to impossible to consistently get right over the long term. We strongly advocate diversifying internationally in case the recent relative outperformance of U.S. versus International markets reverses, as it almost always does.
This communication has been prepared solely for informational purposes only. Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security or a financial product. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.
Wealthfront offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Investment management and advisory services are provided by Wealthfront Advisers LLC, an SEC registered investment adviser, and brokerage related products are provided by Wealthfront Brokerage LLC, a member of FINRA/SIPC.
Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.
© 2020 Wealthfront Corporation. All rights reserved.
Comments are moderated prior to publication
Still need help?
Our support team has your back.Contact us