When investing in exchange traded funds (ETFs), often there is a disconnection between investor belief and investor action. As of late, investors are well-aware of the benefits of international investing, yet only a surprising 13% of individual investors own foreign stocks and a meager 19% say they plan to own foreign investments within the next five years, reports Amanda B. Kish for The Motley Fool.
A recent study conducted by the London-based asset management firm Shroders points to most American investors believing that domestic economic dominance is over and yet they are timid to put their money overseas. This news highlights a potential area of growth for money managers and ETFs alike. The more investors who invest their money internationally, the more of a demand increase there will be for products that lead to overseas markets.
The main reason for investor shyness toward overseas investing is the lack of comfort and knowledge. Today, more than half of the total global stock-market capitalization happens outside the U.S. If the domestic markets fail, then foreign markets can provide other sources of return. A wide variety of international ETFs are available for investors.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.