Taking a global perspective when it comes to investing can sometimes feel like heading into unexplored territory. And when world affairs are lowering stock prices, it may seem like sticking stateside is the best direction to take. But consider the basic investment concept of “buy low, sell high” – buying stocks when the market outlook is uncertain and stock prices echo those concerns can provide an opportunity for adding value and diversification to your investment portfolio.
Why Are Foreign Markets Valued Lower?
Several factors can explain the relatively low prices of other markets compared to the U.S., including:
While there are risks associated with international investments, there are also opportunities – including rising middle-class consumers in emerging economies and technological advances linking business and the world like never before. Developed markets are also benefiting from job growth, low interest rate policies and lower energy prices.
Investing with a Global Outlook
Here’s what we recommend when developing your international investing strategy:
We recommend about one-third of your stock portfolio be invested internationally, depending on your financial goals. Work with your financial advisor to help select the most appropriate international investments and amounts that are right for you.
Mutual fund and ETF prospectuses contain more complete information, including the funds’ investment objectives, risks, and charges and expenses as well as other important information that should be carefully considered. Your Edward Jones financial advisor can provide a prospectus, which you should read carefully before investing. Mutual fund investing involves risk. Your principal and investment return in a mutual fund will fluctuate in value. Your investment, when redeemed, may be worth more or less than the original cost.
Specific risks are inherent in international investing, including those related to currency fluctuations and foreign, political and economic events. Investing in equities involves risks. The value of your shares will fluctuate and you may lose principal. Diversification does not guarantee a profit or protect against loss.