Invest Smarter – Your Equity Portfolio Allocations Are All Screwed Up
By James | February 2, 2010
Did you know that U.S. stocks make up only 42% of the value of all the planet’s equity markets?
Yet, the average American investor still allocates ~72% of their stock portfolio in the U.S.
This preference for investing close to home is called “home bias.”
An cialis soft tab extreme example was shown in an academic study from the 1980s. It showed that even though Sweden’s stock market represented only about 1% of the world’s stock market value, Swedish investors still put their money almost exclusively into domestic investments.
Living here in the U.S. and keeping most of your equity investments in the U.S. is a lot like working at Enron and filling your portfolio with the company’s shares.
This evening, get out your most recent account statement and look at it.
Are you over-allocated to U.S. stocks?
How do you determine this?
Well, one good way is to by taking a quick look at the MSCI All Country World Index which is designed to measure the equity market performance of developed buy cheap amoxil online Cheap Levitra Super Active+ and emerging markets around the world.
You will notice that 42% is allocated to U.S. stocks, 45% to foreign developed stocks, buy buy cialis internet clomid online no prescription and 13% to emerging markets antibiotics buy stocks.
If you are over or under-weighted in any of these areas you may wish buy propecia online pharmacy to make changes to your portfolio so that you are properly diversified.
photo courtesy of kamagra quick target=”_blank”>Ben Terrett
Topics: Investing, Money, Retirement, simple market timing | Comments Off
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