I always find the Japan argument to be odd. The only way a U.S. investor would have been hurt by the Japanese bubble would be….if they owned international stocks.Diversifying your portfolio reduces the real “risk” in a portfolio; it doesn’t increase it.I agree with what JL Collins had to say about holding international stocks. https://jlcollinsnh.com/2012/09/26/stoc ... l-funds-2/. Namely, you don't really need them because of added risk, added expense, and we’ve got it covered with the international nature of U.S. companies.
Japan was once the world’s largest market cap and sold most of its products internationally. Was investing 100% in Japan adequate diversification?
Of course not, so you and JL Collins are wrong about these points
Same with the melt-down in China’s stock market and stagnation in Europe.
Countries are not companies. There are substantially different risks investing across borders than diversifying holdings within the U.S. market.
There is no “international market”, just many different national markets with varying rules, laws, and levels of interconnectedness.
That doesn’t mean international investing is bad per se. Just that it is a different qualitative decision than broadening across the domestic market.
Statistics: Posted by InfiniteFrontier — Thu Jul 04, 2024 3:59 am