It is a simple thought experiment. Would you rather invest in South Korea, “a world leader in electronics, telecommunications, automobile production, and shipbuilding,” or in North Korea, where “corruption is endemic at every level of the state and economy”? The obvious choice is South Korea.
Making the choice to favor the free countries of the world over their more repressed counterparts is Freedom Investing.
For over a decade, we’ve been advocating freedom investing, the idea that investing in countries rated high in economic freedom should produce better returns than investing in countries with more controlled or repressed economies.
On Friday, November 5, 2021, Megan Russell was interviewed by Michael Morton of Financial Planning for Entrepreneurs podcast. Michael Morton is the founder of Morton Financial Advice where he provides hourly or subscription-based financial planning and wealth management.
The episode was released on Tuesday, December 7. You can listen to the audio here:
Show Notes and Related Links:
- A 25-Year Review of Freedom Investing demonstrates how Economic Freedom seems to have been a valid factor for higher expected returns than investing in the EAFE Index alone.
- Risk-Return Analysis of Freedom Investing reviews the quantitative measurements and performance metrics of Freedom Investing to see how its risk and return compare to the EAFE Index, its benchmark.
- You can review the latest quarterly performance of freedom investing in “Freedom Investing in Review (September 2021)” or by browsing our article category here.
- If you want to hear more about Hong Kong, you can read “2021 Index of Economic Freedom: Hong Kong.”
- Home bias is the tendency of investors to invest a majority of their assets in companies domiciled in their home country. Investors who fall prey to this bias often ignore the benefits of diversifying into foreign investments. “Overcome Your Biases and Invest Globally” encourages you in this area.
- Diversification produces a more consistent return while dampening returns. You can read more about this in “Diversification: Why Not Put Everything in Whatever Will Go Up the Most?“
- Tickers for our current country-specific funds:
- Australia: FLAU
- Canada: FLCA
- Switzerland: FLSW
- United Kingdom: FLGB
- Denmark: EDEN
- Finland: EFNL
- Ireland: EIRL
- Netherlands: EWN
- New Zealand: ENZL
- Singapore: EWS
- Hong Kong: FLHK
- Taiwan: FLTW
- Chile: ECH
- You can find our modified Freedom Investing strategy in our Gone-Fishing Portfolios here.
- You can read more about how our Freedom Investing service fits into our service levels.
- You can read our Pro-Con list between hand-trading and algorithm-invested here.
- You can read more about the countries to avoid in “Avoid the Ring-of-Fire’ Countries.”
- Our health insurance articles mentioned are here.
Photo by Vladislav Klapin on Unsplash