Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thanks, Brandy. Appreciate it.
Brandy Auterson-Hurst:
So David, a lot of investors have questions about how much they should own internationally versus staying invested in the US. How do you think about that balance?
David Nelson:
Yeah, it’s a great question. And one we hear all the time. For the most part, US investors invest in the US. It’s kind of a natural place as far as to start. But every so often we hear people, they want to … Am I missing something as far as abroad? Is it, should I be diversified more so as far as outside the US? So I brought along a chart today that will illustrate, I think, really important points that people need to remember. And that basically centers around. We’ve got the line in the middle there as far as the yellow line. Basically what it’s illustrating is when the blue line is above the yellow line, that’s indicating that the US is outperforming other countries around the globe.
We’re in a very unique situation right now where when we look at it’s below, the line is below, which basically translates into that the markets around the globe are outperforming as far as the US. Pretty rare as far as to find. As we speak, it’s about an 8% difference as far as between the two, as far as above versus below.
But what’s interesting is historically the S&P 500 has outperformed international markets on an annual basis by about 8%.
Brandy Auterson-Hurst:
Okay. So should investors be rethinking how much they have invested overseas?
David Nelson:
We prefer to let the data do the talking and the data basically is illustrating and I think a really important point today, and that is that this is probably a one-off, and so I wouldn’t get too excited about some of the returns abroad. I would probably lean more towards the US versus abroad.
Brandy Auterson-Hurst:
All right. David, thanks for your insight today.
David Nelson:
Thank you.