Time for More Focus on International Investing?
- Category: J Randall Gladden Blog
- Published: Tuesday, 02 May 2017 19:03
- Written by Super User
First off, let me say it… risk, risk, risk. Ok for the (completely correct) grammar police I know I use the word risk way too much, but how else do you say it?
As many of you know I have been wary over the last few years of international investments. Taking excessive risk without a clear strategy is the equivalent of gambling.
After the “great recession” hit the world economy, it didn’t make sense to accept that additional risk when America had so much potential. Now the global economy has continued to recover at varying speeds and many American company’s P/E ratios are a bit pricey.
The American economy seems poised for continued growth, which may cause the dollar to continue to strengthen. So, for those who are inclined to take more risk…there may be opportunities presenting themselves in the international markets.
Remember, along with your normal investment & economic risks, when you invest internationally you also are accepting additional risks such as political and exchange rate to name just two. One look at what’s happening in Venezuela and the seizure of the GM plant there and you know what I’m saying is more real than one might like to admit.
I am still reluctant to approach emerging markets. They tend to be tied closely to commodity prices. The Chinese economy is uncertain and has traditionally been a huge buyer of the commodities. That isn’t to say you can’t do well, but again you are taking a whole new level of risk when investing internationally.
Mark Twain famously commented that he was more concerned about return of his money than return on it. If you feel similarly, you might consider staying with America.