In a recent article, my colleague Ben Johnson argued that investors have fewer reasons than ever for maintaining "home bias" in their portfolios. What's home bias? It's investors' tendency to tilt their portfolios in favor of domestic stocks versus foreign fare. He points out that U.S. stocks constitute about 55% of the world's public equity market cap, with foreign stocks representing the remaining 45%. But most U.S.-based investors' equity allocations are nowhere close to that breakdown.
"When it comes to investing overseas, many decide to ditch diversification at the border," Johnson notes.
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Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.