Why invest internationally?
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Thread: Why invest internationally?

  1. #1
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    Why invest internationally?

    I know I should for diversification but there has never been a time as far as I can tell where in a fiscal year when the US got hit that international didn't get hit harder. So this leaves just the upside as a reason. Less than 10% of the time does international outperform the US in the last 10 years.

    On top of all that europe is still highly unstable, asia is mostly-ok and south america is also unstable. What's the reason for investing international today?


  2. #2
    Senior Member My Own Advisor's Avatar
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    I have often though about this as well. They (experts) always say to invest in international markets but I'm not convinced long-term this is smart.
    https://www.blackrock.com/investing/...ager-va-us.pdf
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  3. #3
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    I share this concern. I suspect that one Canadian and one US index, say XIC & ZSP, may be all you really need. At the risk of speaking on his behalf, I think Argonaut does as well.

    Currently I'm only in Canada & US, but I keep changing my mind on this.

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  5. #4
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    Yea.. one thing what I was thinking is only buying emerging post a large correction

  6. #5
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    This is a typical example of "recency".

    In reality international shares outperformed N America, for example, in the 70s. In fact, holding international stock was the only way to get any growth.

    And in any case past isn't the same as the future.

  7. #6
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    Quote Originally Posted by jbonne84 View Post
    Yea.. one thing what I was thinking is only buying emerging post a large correction
    Why? It is the most volatile of all equity markets in which EM is only 10.5% of global market capitalization and much of that is taken up by the casinos of Russia and China where economic numbers are likely made up in the back room of the respective President's offices and/or the result of pumps by the oligarchs.

  8. #7
    Senior Member tygrus's Avatar
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    Investing in canada is the same as investing internationally except safer and without the corruption. We are mostly export based so if other countries are doing good so are we. I wouldnt have a dime outside Canada or US.

  9. #8
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    Quote Originally Posted by AltaRed View Post
    Why? It is the most volatile of all equity markets in which EM is only 10.5% of global market capitalization
    I seem to recall it's 15%.

  10. #9
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    Quote Originally Posted by mordko View Post
    I seem to recall it's 15%.
    I used http://www.agf.com/institutional/glo...i-acwi-cad.pdf for my source.

  11. #10
    Senior Member GreatLaker's Avatar
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    From 2003 to 2006 EAFE significantly outperformed S&P500. Emerging and TSX also did well. Yes I cherry picked the time period, but to prove a point.
    See this link for the periodic table in CAD: http://www.stingyinvestor.com/cgi-bi...&StopYear=2007

    Over that time period the CAGR in CAD according to Stingy Investor Asset Mixture was:
    S&P500: 6.4%
    EAFE: 15.7
    TSX: 20.5
    Emerging: 26.9

    With international diversification so easy and cheap these days, my preference is greater diversification when it is available at a reasonable cost. Also I always am wary of recency effect.

    [sarcasm]Although with Trump/Pence running the US, and Trudeau/"More Dough" Morneau running Canada it's easy to believe the recent out-performance of US markets will continue forever.[/sarcasm]

    Eschew obfuscation. Espouse elucidation

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