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Today, Investing Internationally
The world is your ouster and it’s time to get your financial passport stamped. Hi! I’m Zena Spezakis and welcome to Tonka Beans. The world is a big place and you cannot only buy products from overseas but you can and should investing internationally for two reasons. International markets offer vast opportunity and diversification benefits, why? Let me explain. Did you know that the US isn’t necessarily the best performing stock market? Putting your patriotic feeling aside for a minute, consider that from 1970 to 2005 the U.S. market never rank as a top performing market for any one year. Maybe that’s why over a half of the total market value of all companies in the world lays outside the U.S., that’s a lot of opportunity. You're also going to hear the world diversification a lot it basically means not putting all your eggs in one basket.
You can diversify by spreading your investment across different companies, investment types and even countries. In my mutual fund video I cover this in more detail. How much should you buy internationally? That’s depends on a of things but if over half the worlds market cap is outside the US you could be justified in investing at least a little bit. And again, a word of caution, although you take risk on—if you invest in more securities, International investing has an special risks, this include changes in currency rates, political, economic changes as well as the fact that many form markets just don’t operate with the same transparency that the US does. Many of these risks can be avoided if you keep away from investing in specific countries rather abroad internal index fund is the way to go. And if you’ve watch any of my videos you’re probably sick of me telling you to invest into a specific type of mutual fund called an index fund. Well, I’ll say it again, the best way for small investors to buy international stocks is through in internationally index fund. Buy why you ask? Watch my video on only buying stocks to index funds to find out.
And for more information, please visit us a tonkabeans.com, we also want to hear from you so please join our community and become on of our opinion makers. Until next time, I’m Zena Spezakis and this has been Tonka Beans. Thanks for watching.
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