Author Topic: International vs. domestic  (Read 1543 times)

El Gringo

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International vs. domestic
« on: May 31, 2013, 01:12:25 PM »
So between Europe, the BRICs, and now recently Japan, international stocks have been taking a beating as of late. I'm generally excited about investing internationally, particularly in emerging markets, but I'm wondering if I should start putting more money into the US market, as things seem generally more optimistic. Even on negative days for the US market, my international funds take a significantly greater beating.

Here's my question: as I continue to DCA, should I put more money into the US market which seems generally more optimistic? Or as prices continue to go down in international stock, should I buy more international shares because they are getting cheaper?

I realize that this is partially speculative, but I'm a relatively newbie in investing so I'm interested in hearing people's thoughts.

matchewed

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Re: International vs. domestic
« Reply #1 on: May 31, 2013, 01:32:56 PM »
My take on domestic vs. international is that due to globalization and how markets are formed these days that most companies do global business. By investing domestically you have global exposure. International stocks just happen to be non-American companies that do business globally too. No real difference IMO.

It is speculative and being driven not by DCA but by your perception and emotions towards the ups and downs in the markets. I personally don't let that bother me and stick with a DCA strategy regardless of what happens. The portion of my money which goes into savings beyond my monthly investment will gather there and if I see an opportunity (perhaps a large correction or another recession) I have the cash to take advantage. But I won't let day to day swings influence that.

Relevant MMM article - http://www.mrmoneymustache.com/2013/05/07/how-to-prosper-in-an-economic-boom/

frugalcoconut

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Re: International vs. domestic
« Reply #2 on: June 05, 2013, 08:06:36 PM »
I'd say be contrarian and pick up more international on the cheap ... whether through DCA or rebalancing.

My general outlook is that things are somewhat saturated domestically whereas much of the foreign market has significant upward potential because those budding economies have plenty of room to grow.  I agree that this will already be reflected in U.S. companies that are expanding globally but I would still want to have a dedicated allocation towards non-U.S. funds.