The Wide World of Investing: Adding International Value and Diversification to Your Portfolio



Taking a global perspective when it comes to investing can sometimes feel like heading into unexplored territory - but it doesn't have to be. The current international investment landscape has numerous factors coming together to create some attractively-valued opportunities for the long-term investor. Buy Low, Sell High To understand this opportunity, we need to apply the basic investment concept of “buy low, sell high” - in other words, the best time to buy stocks is often when the market outlook is uncertain and stock prices echo those concerns. And right now, some international stocks are reflecting global worries and are more attractively valued. Leaders Rotate When considering the current international investment opportunity, remember that "leaders rotate." This is a concept we discuss a lot when it comes to performance. Different types of investments, known as asset classes, take turns leading performance. Investor sentiment often pushes valuations too high in favorable times, and then pulls values down in tough times, by swinging too far in the opposite direction. However, this pendulum effect can create opportunities for long-term investors. International-market stocks have not performed as well as large U.S. stocks in the S&P 500 over the past several years - but, this trend is expected to reverse sometime in the future, with international developed-market economies recovering first. What Does This Mean for Your Portfolio? International investments carry opportunities for diversifying your portfolio, but they also carry their own risks, downturns and unforeseeable events, and performance cannot be guaranteed. Edward Jones' guidance recommends about one-third of your stock portfolio be invested internationally, depending on your financial goals. Ask your financial advisor about the amount that is right for you and opportunities to consider as you work toward your long-term goals.

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