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International Investing:
Still a Journey to Consider
C
olumbus Day was observed on October 9. And while it may
be true that Leif Erikson and the Vikings beat Columbus to
the New World, Columbus Day nonetheless remains important
in the public eye, signifying themes such as exploration and
discovery. As an investor, you don’t have to “cross the ocean
blue,” as Columbus did, to find opportunities – but it may be
a good idea to put some of your money to work outside the
United States.
So, why should you consider investing internationally? The
chief reason is diversification. If you only invest in U.S. companies,
you might do well when the U.S. markets are soaring, as has
happened in recent years. But when the inevitable downturn
happens, and you’re totally concentrated in U.S. stocks, your
portfolio will probably take a hit. At the same time, however,
other regions of the world might be doing considerably
better than the U.S. markets – and if you had put some of your
investment holdings in these regions, you might at least blunt
some of the effects of the down market here.
Of course, it’s also a good idea to diversify among different
asset classes, so, in addition to investing in U.S. and international
stocks, you’ll want to own bonds, government securities and
other investment vehicles. (Keep in mind, though, that while
diversification can help reduce the effects of volatility, it can’t
guarantee a profit or protect against loss.)
International investments, like all investments, will fluctuate
in value. But they also have other characteristics and risks to
consider, such as these:
• Political risks – When you invest internationally, you’re not just
investing in foreign companies – you’re also essentially investing
in the legal and economic systems of countries in which those
companies do business. Political instability or changes in laws
and regulations can create additional risks – but may also
provide potentially positive returns for investors.
• Social and economic risks – It is not always easy for investors to
understand all the economic and social factors that influence
markets in the U.S. – and it’s even more challenging with foreign
markets.
U.S. markets are now worth less than half of the total world
markets, and growth in the rest of the world is likely to keep
expanding the number of global opportunities. You can take
advantage of that global growth by putting part of your portfolio
into international investments, including developed and
emerging markets.
In any case, given the more complex nature of international
investing, you’ll want to consult with a financial professional
before taking action. If it turns out that international investments
are appropriate for your needs, you should certainly consider
going global.
This article was written by Edward Jones for use by your local
Edward Jones Financial Advisor.
• Currency fluctuations – The U.S. dollar rises and falls in
relation to the currencies of other countries. Sometimes, these
movements can work in your favor, but sometimes not. A
strengthening dollar typically lowers returns from international
investments because companies based overseas do business in a
foreign currency, and the higher value of the U.S. dollar reduces
the prices, measured in dollars, of individual shares of these
companies’ stocks. The opposite has happened in 2017, when the
weaker dollar ha s helped increase returns from international
investments.
Matt
Dudkowski,
AAMS® | Financial
Advisor | 1007 Mt Royal Blvd. Pittsburgh, PA 15223 | 412.487.3300
Matt
Dudkowski,
AAMS®
[email protected]
| www.edwardjones.com
Financial Advisor
.
Matt
Dudkowski
has been
1007
Mt Royal
Blvd a financial advisor with Edward Jones since 2002, serving individual investors in
the
Pittsburgh
area
from
his Shaler Township office. In January of 2015, Dudkowski accepted an invitation
Pittsburgh, PA 15223
to 412-487-3300
become a limited partner with the firm.
Since joining Edward Jones, Dudkowski has obtained the professional designation of AAMS®. Prior to Edward
Jones, Dudkowski, as a CPA, worked at the H.J. Heinz Company, and at Ernst & Young LLP.
He currently serves on the board of directors for Keystone Wellness Programs, a local nonprofit organization.
A native of Butler County and a graduate of the University
of Notre Dame, Dudkowski resides in Gibsonia with his wife,
two sons and daughter.
Matt Dudkowski has been a financial advisor with Edward Jones since
2002, serving individual investors in the Pittsburgh area from his Shaler
Township office. In January of 2015, Dudkowski accepted an invitation to
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