Bend, Oregon is a sportsman’s paradise. Bend is located in Central Oregon and is home to the Deschutes River and Mount Bachelor. It’s a great place for hiking, biking, climbing, skiing and fishing. And after a long day of doing your thing you can enjoy a burger and beer at the Deschutes Brewery.
Bend consistently ranks in the top ten places to live and is a vacation destination for many.
After college, my friends and I skied Mt. Bachelor a few times and fell in love with Bend. My college roommate loved it so much he decided to pack his bags and move there full time. He has taken full advantage of Bend and all it has to offer the local residents. He has spent many hours fly fishing on the Deschutes, skiing Deadwood Canyon and mountain bike riding on the Funner-Tiddlywinks trail.
As great as Bend is, however, my friend has travelled the world looking for bigger fish, deeper powder and longer trails. Whether fly fishing in Alaska, dove hunting in Argentina or heli-skiing in Canada he has taken the road less traveled and it has treated him well.
What does Bend have to do with investing?
Most investors never leave their home country when it comes to investing. Investors are satisfied with owning stocks in their backyard and not spending enough time exploring the four corners of the earth looking for new and fresh ideas. This creates a home country bias and it could be hazardous to your investment portfolio. According to a Vanguard study investors had 27% of their assets invested in foreign companies. If an investor was staying true to a global allocation, then they should allocate about 50% of their account overseas.
In a recent study by Dimensional Fund Advisors on diversification they highlighted the lost decade of 2000 to 2009. During this decade the S&P 500 lost 9.10% while the MSCI Emerging Markets Value Index was up 212.72%. Last year, the top three developed markets were Denmark, Belgium and Japan up 23.4%, 12.1% and 9.6% respectively. The U.S. market returned .7%. Since 1996, the U.S. market had the best return twice – 2013 and 2014. The best returns for the other 18 years were found beyond our shores.
You may live in a great city and own great investments but I’d recommend leaving your home port and explore opportunities far and wide. It has served my friend well.
In the beginning God created the heavens and the earth. ~ Genesis 1:1
Bill Parrott is the President and CEO of Parrott Wealth Management, LLC. www.parrottwealth.com.
May 14, 2016