Since 2009, the United States stock market has outperformed the stock markets of most other countries, and you have not heard as much investment commentary touting the value of international diversification. I think much of the debate is silly, as the kinds of companies that make up the S&P 500 generate a substantial chunk of their profit outside the United States. Coca-Cola may be considered the most Americana of companies, but it makes 80% of its profits outside the United States.
You want 3% of your portfolio in Mexican stocks? Well, Coca-Cola makes 3% of profits in Mexico. Problem solved.
I do understand, however, that people may want to own investments that are focused primarily on a single country so they often turn to the popular index funds of the companies that they are choosing. My argument is that, rather than owning the index fund that represents the economic output … Read the rest of this article!