Ignore International Stocks
You may already have more international exposure than you realize.
What This Means
Before buying international stocks, realize that you may already have the exposure you’re looking for. Many of the largest U.S. companies already generate a significant portion of their revenue overseas. In many cases, you’re getting global exposure without buying a separate international fund.
Companies like Apple, Microsoft, and Coca-Cola sell products and services around the world. Their success isn’t tied solely to the U.S. economy, allowing investors to benefit from global growth while owning U.S. companies.
Investing directly in international markets also introduces additional risks, including changes in government policies, political uncertainty, currency fluctuations, and different accounting and regulatory standards. For us, those additional risks often aren’t necessary.
International stocks will absolutely have periods where they outperform U.S. stocks. The challenge is knowing when those periods will occur. Rather than trying to predict which countries will lead next, we prefer keeping portfolios as simple as possible and focusing on businesses we understand.
It’s a global economy. Sometimes investing close to home gives you all the international exposure you need.
Common Questions
What about traditional asset allocation?
We don’t believe in the traditional approach to portfolio construction. We believe it often leads investors to own investments simply because they’re supposed to, not because they improve the portfolio. We like diversification, but we avoid over-diversification. We also prefer investments that are more transparent and easier to understand
Is this the right approach for everyone?
No. This is just our philosophy at PureVest. We know it isn’t for everyone, but we don’t believe most investors need to own international stocks to reach their long-term goals.
Remember This:
You don’t have to invest around the world to invest in the world.