Hear of the investing phenomenon of home-country bias? If you’re a regular reader, you definitely have because it’s something I’ve talked to you about often in recent months, including a two-part series, you can see here and here.
I do this because it’s pervasive across time and geography… and it can be very damaging to your investment portfolio if ignored.
It may make investors feel all warm and fuzzy inside, but it generally tricks us into accepting lower returns and higher volatility from domestically-tilted portfolios.
In the U.S., this is particularly prevalent. Americans prefer investing in U.S. stocks because, psychologically, it feels like the right thing to do.
But it’s not!
And it’s hurting your portfolio.
In the following infographic, How Investors are Falling Short on Their Returns, we look at several different reasons why you should avoid falling prey to the phenomenon of home-biased investing and what could happen if you take advantage of opportunities abroad…