In Praise Of Foreign Markets

Now is a perfect time to take advantage of the best relative valuations in 20 years. For a variety of reasons including strong dollar, and a later recovery than America from the unfortunate events of 2008 and 2009, foreign stocks are on sale. It’s counterintuitive to hold or purchase stocks that have recently disappointed us. However, it’s axiomatic that the cheaper you buy stocks the better your forward-looking expected returns are. Keep a long term focus We all focus on recent events. In a world where the stock ticker crawls across the bottom of your news feed every second, three days seems like a long term, and three years is an eternity. Yet, even ten years isn’t really a long-term horizon. It takes patience and discipline to execute a rational long-term investment strategy. Something in your asset allocation is always disappointing you. The temptation is to dump it and chase performance which is never a good idea. Fortunately, for long term investors a disciplined process of rebalancing enforces a systematic buy low - sell high policy without making guesses as to market timing.