With uncertainty on the rise, one top strategist explains why investors should diversify abroad.
Transcript:
SKYLER WEINAND: Right looking at allocations between domestic and international investing, it’s definitely time for investors to not be 100% domestic, not be 100% US, and maybe look to be 20% to 25% international. And that doesn’t mean emerging markets. It means looking to Europe, looking to Australia and Japan, some more stable economies out there that are actually showing pretty good growth and are really good values when we look at PE ratios.
A balanced portfolio for us, especially on the stock side, is at least 25% international, staying primarily in developed economies. That 25% can be 5% to 10% emerging markets because I do see tremendous value in South America, particularly Brazil, but also India. Look at Apple shifting production from China to India here over the next 5 to 10 years. But then staying domestic, the US exceptionalism, I don’t think has been whittled away just in the last three months. I think it’s here to stay. We’re going to see dollar reserve currency for at least the next few generations. So domestic stock market is going to continue to do great. But also looking at bonds, there’s a tremendous amount of value having a good bond allocation, whether that’s 2021, 30% or 40% earning 5% to 7% in very high quality fixed income bonds may beat stocks for the next five years.
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