Dimensional On: Why Should We Invest Internationally?

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Dimensional Funds produced a series of videos answering common client questions and concerns for use by advisors like us. This video is entitled: Why Should We Invest Internationally?

With the recent superior returns in US stocks, I think the most significant quote from the video was:

From 1973-2015, the S&P 500 performed better than a globally diversified index portfolio on an annual basis 17 times.

It performed worse 26 times.

I recommend watching the video to understand better why the diversification of including foreign and emerging market stocks is used in portfolio construction.

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.