9 risks to international investing (yes, maybe you should invest a portion of your diversified portfolio internationally but adjust the amount based on these risk factors):
(1) Interest rates globally
(2) GDP year-over-year changes within countries you are considering (growth rates)
(3) Economic future
(4) Central bank's influence
(5) Political stability
(6) Level of exports versus imports (the U.S. exports much less than other countries)
(7) Assets and commodities versus a country's capabilities (their intellectual, service industry)
(8) Debt to GDP (Japan's is 200% for example); also, the current deficit versus their reserves
(9) Per Capita value (not just the population size); for example, much of the world still lives on dollars a day, including China and India though their populations are large
I believe that future growth is, however, in these non-U.S. countries, but stock market performance is based on growth "expectations" not necessarily the actual growth rate.
When looked at through this prism of these nine factors, the U.S. truly does shine in comparison to other countries. Here is the question:
"...If the U.S. is "expected" to grow at a rate of 2% and it grows at greater than this rate, would investors like that better than if an emerging market country's growth rate was "expected" to be 8% but it only grew at 6%?.." Something else to think about.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.