Global Diversification Can Make a World of Difference

April 26, 2021

The US stock market is the biggest in the world, but investors who ignore other global markets may miss out on a wealth of opportunity.
Stocks of the roughly 17,500 companies trading outside the US represent nearly half of the world’s $74 trillion equity market.
When determining where to invest, a country’s size, population, or gross domestic product may not be a primary consideration. Japan, for instance, is relatively small in landmass but accounts for 7% of the world’s equity market value, representing more than 2,600 companies, including familiar names like Toyota and Sony. Even a tiny country like Switzerland is home to publicly traded giants like Nestlé and two of the world’s biggest pharmaceutical firms.
A strategy focused on global diversification captures returns from thousands of companies around the globe and can potentially offset weak performance in one market with stronger returns elsewhere

International Exposure Tilt in Client’s Portfolio’s

Our team at McIlrath | Eck began to implement greater exposure in the summer of 2020 to international equities and fixed income assets due to the heavily backed belief that greater potential and strong performance is forecasted in foreign markets. US firms will continue to be a main staple in our portfolios, though a motivation to escape the surging prices in the US due to areas of overpriced securities (likely due to record monetary intervention) has prompted the tilt to international exposure.
Clients may see recent purchases from advisor reviews or ongoing portfolio rebalances into international funds, primarily through ETFs and institutionally priced mutual funds.
As always, we take our Fiduciary obligations to you seriously and are aware of the trust you have placed in us to help you reach your dreams and goals.

There is no guarantee investment strategies will be successful. Investing involves risks including possible loss of principal. Diversification does not eliminate the risk of market loss.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services

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