Yes, thanks. I think the comparative stock risk of US domestic vs international is likely rooted in country governance risk ranging from wars, regulations, monetary and fiscal policies etc.... I suppose stock diversification between US domestic and international is one way to lower the governance risk.I don't think that is correct.I have read that much of the US domestic stocks greater past returns vs international stocks is due to a rising value of the dollar. Does this make investing in international stocks mostly a way to offset a decrease in the value of the dollar during periods of a falling dollar. If this is true, why not skip the international stocks and simply invest in unhedged bonds?
In USD terms, since 1900, US stocks have outperformed global stocks by about 1% pa. That's not currency, the US dollar did not rise by that much over the course of the 1900-2020 period.
Investing in international equities is about diversification across stock risk, not just currency.
Statistics: Posted by jimkinny — Thu Nov 28, 2024 5:36 am — Replies 7 — Views 468