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Three Reasons For International Diversification

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This topic contains 0 replies, has 1 voice, and was last updated by  Emma Walsh 2 years, 9 months ago.

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    Emma Walsh

    From the B&P Briefing, March 25, 2015:

    If you haven’t been internationally diversified lately, you’ve been missing out.

    The S&P 500 is up just 1.6% year to date. But the MSCI India Index is up 5.1%. The MSCI Japan Index is up 13.1%. The MSCI Europe Index is up 17.1%. And the MSCI Russia Index […] is up 18.8%.

    There are three main reasons why overseas stocks are outperforming…

    *** First, valuations are more attractive overseas. […] the US is one of the most expensive stock markets in the world.
    *** The second reason is monetary policy. Right now, the Fed’s QE is on pause. That makes places where QE is in full swing – such as Europe and Japan – more attractive (over the near term at least).
    *** The third reason overseas markets are becoming attractive is because stock prices outside of America – think Europe, Russia and the other big emerging markets – already reflect a lot of bad news. So, even the faintest glimmer of hope can send prices surging.”

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