Knowledge is power.
We empower our clients.

Get Started Now
<< Back to Helpful Tips

Why International Companies Deserve a Place in Your Portfolio

Every day, millions of Americans increasingly use products made or assembled in countries around the world. Cell phones, refrigerators, automobiles, furniture and airplanes are just a few examples of internationally-produced goods. Yet many U.S. investors tend to purchase mutual funds that own only U.S. domiciled companies. Due to this home country bias, investors could be missing out on the potential opportunities offered by international stocks.

Access to Growth Outside the U.S.

While the U.S. economy is one of the largest in the world, many other areas of the world may be growing at a faster pace. As a result, the U.S. has become a much smaller part of the overall global economy. According to the International Monetary Fund, emerging and developing economies accounted for 70% of global growth in 2015.

Many developing countries have less mature markets compared to the U.S. but have implemented policies that promote economic growth. These policies encourage companies to expand their business, invent new products, sell more goods and hire workers. In addition, many emerging economies have large populations of young consumers experiencing rising wealth.

As an investor, it is possible to gain access to this growth by allocating a portion of your portfolio to international companies with access to these faster-growing economies.

Increased Diversification

It’s generally not wise to put all your eggs in one basket. Many asset allocation studies have found that portfolios made of U.S. and non-U.S. investments have historically increased diversification. Diversification can help you meet your long-term financial goals by enhancing a portfolio’s return and reducing risk. Compared to U.S. stocks, international companies can move in different directions or different degrees, smoothing returns over time.

Attractive Risk and Return Characteristics

Because of the differences in performance between U.S. and international stocks, an overall portfolio that includes domestic and international companies could achieve similar returns as those offered by U.S. stocks but with potentially less risk. The diversified portfolio may also achieve increased returns with the same amount of risk as a portfolio made of primarily U.S. stocks.

Log In to Your Existing Account Get Started Now

Need assistance? Call 855.662.2121 or email info@jemmafinancial.com

You are now leaving Jemma Financial

Yes, I would like to leave No, I would like to stay

Important Notice

You are now leaving the Jemma Financial Services website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.

Schwab is a registered broker-dealer, and is not affiliated with Jemma Financial Services or any advisor(s) whose name(s) appear(s) on this website. Jemma Financial Services is/are independently owned and operated. [Schwab neither endorses nor recommends {Name(s) of Investment Management Firm(s)}, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with “Name(s) of Firm(s)” under which Schwab provides Jemma Financial Services with services related to your account. Schwab does not review the Jemma Financial Services website(s), and makes no representation regarding information contained in the Jemma Financial Services website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

IMPORTANT NOTICE

You are now leaving the Jemma Investment Advisors, LLC Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website. Schwab is a registered broker-dealer, and is not affiliated with Jemma Investment Advisors, LLC, or any advisor(s) whose name(s) appears on this Website. Jemma Investment Advisors, LLC is independently owned and operated. Schwab neither endorses nor recommends Jemma Investment Advisors, LLC. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Jemma Investment Advisors, LLC under which Schwab provides Jemma Investment Advisors, LLC with services related to your account. Schwab does not review the Jemma Investment Advisors, LLC Website, and makes no representation regarding the content of the Website. The information contained in the Jemma Investment Advisors, LLC Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Continue to Schwab

This will close in 0 seconds