International Stocks: Are They Worth The Risk?

With continued clamor over the valuation of domestic stocks, it is certainly rational for traditionally “U.S.-only” investors to be evaluating the merits of alternative securities. International and even emerging markets equities are oftentimes thought of as sound diversification for portfolios that are primarily, or even solely, dedicated to companies headquartered in the continental 48.

Although popular consensus tends to include international equities as part of a diversified investment program, the special, usually elevated risks may preclude their use by some investors. For most, however, targeted non-U.S. exposure may provide portfolio value and should certainly be considered. Since it’s generally difficult to know when and for how long foreign stock markets will outperform, being passively or more actively exposed to them probably dampens overall portfolio volatility and could increase blended performance over time.

Source: Learn Bonds

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