Wednesday, 26 July 2017 00:00

American’s Love of Domestic Stocks is a Weakness

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(New York)

Bloomberg says advisors have a problem on their hands—that US clients’ love of domestic stocks is hurting their portfolios. Call it patriotism or home-bias, but American investors love to invest in US equities. The big problem is that US stocks have some of the highest valuations in the world, meaning they are not good value for money versus many international markets at the moment. However, that has not kept Americans from buying them hand over fist and increasing their overall exposure to the market.

FINSUM: This is one of the things that many American investors don’t do particularly well, especially on the retail end—diversify. But then again that is what also drives big gains in the market.

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