Diversification has long been the cornerstone of some of the biggest investors’ strategies. This is why mutual funds continue to be one of the most popular investment options for seasoned investors. Why that is, is the topic of this article.
So we’ve provided 7 incomparable benefits of becoming an international investor in mutual funds.
If this is something that you’ve wanted to know more about, keep reading to find out more.
Table of Contents
1. Better Market Exposure
As mentioned at the outset, diversification is one of the main aspirations of a mutual fund investor. If you already have a diversified portfolio within your country, going international can help you to further diversify your portfolio by investing in markets that may be outperforming your country’s. Stay till the end to find out why this is crucial.
2. Diversifying Currency
Similarly, investing in international markets in which there is growth also means that you can benefit from the currency’s appreciating value. This may help to cushion any dips in your country’s market, without your entire portfolio suffering in the process.
3. Make the Most of Emerging Markets
Setting up mutual funds in countries that are relatively new to trading may prove a smart move once these markets become established. This reason may not be for everyone, but it’s worth looking into if you’re a more experienced and adventurous investor.
4. Professional Money Management
One of the things that put people off investing in stocks overseas is the lack of knowledge they may have in a particular country’s economy.
The great thing about mutual funds, over other types of investing, is the professional support available. For instance, If you were thinking about Israeli mutual funds, they will be accompanied by professional fund managers who will ensure that your portfolio gets the most bang for its Shekel.
5. Disciplined Investing
Investing often gets a bad rep because of the horror stories that are told about bad decisions with single stocks and CFDs. These stories are often based on investors getting greedy and making rash and naive decisions while putting all their proverbial eggs into one basket.
Investing in mutual funds discourages this type of behavior. For example, Systematic Investment Plans (SIP) help to guide investors’ decisions based on solid principles instead of pure emotions.
6. Investment Modes
The abovementioned SIP is just one example of the variety of investment modes that mutual funds offer. This is to ensure that your investments work for your circumstances and goals.
For “high risk, high return” investments, a One Time Investment Plan might be the way to go. For the more conservative mutual funds investor, an SIP and STP could be more to your taste. You can be far more in control of your returns with mutual funds than any other investment option.
7. The U.S. Won’t outperform forever
Last but certainly not least, a little wake-up call. The U.S’s 11 year run in a Bull market came to an end in March of 2020 as a result of the pandemic. There is a saying in the investing world “Bull markets don’t die of old age”.
The pandemic was a reminder of how quickly things can change. Investors with a home-country bias are setting themselves up for failure. Instead, they should be keeping their eyes on the world if they want to be in the game for the long haul.
An International Investor Is a Wise Investor
As we can see, it’s in your best interest to become an international investor. While there may still be risks to take into consideration, when it comes to diversifying your portfolio, the international investor is truly the one looking at the bigger picture.
So, secure your financial future by looking at the world scene. The world is well and truly your oyster!
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