What do most investors have in common with football lovers? They like their home country players. The reason of this has been studied extensively in the investment world which we call behavioral finance. And investors’ natural tendency to be most attracted to investments in domestic markets is called “home country bias”.
You see, if you could build the world’s best soccer team, chances are you would choose the best players from around the world. The same principle should apply if you want to build the best investment portfolio.
Thinking Global with Your Investments
Diversification is critical to any portfolio. Where you invest can be just as important as what you invest in. If you want to draw up a strategy for the right mix of investments, you have to expand your investment horizons and look for opportunities beyond Singapore’s borders.
This short and fun videos from Franklin Templeton can help you understand this concept. In football, the best teams have players from all over the world on their rosters. Similarly, portfolios with a global strategy can provide a better opportunity for you to achieve your long-term investment goals.