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In the US, American stocks are viewed as lower risk than "international" which lumps together all other nations. In China, they view Chinese stocks as lower risk than all other nations.
Clearly this is a chauvinistic bias on investment decisions and is irrational. How can one allocate investments by country without chauvinistic bias?
because international investing adds more layers of risk it is more risky for an american investor .
you have currency risk added to the equation , political risks and accounting risk as they do not conform to the same standards of accounting as we do so i am not sure of what you are asking .
because international investing adds more layers of risk it is more risky for an american investor .
you have currency risk added to the equation , political risks and accounting risk as they do not conform to the same standards of accounting as we do so i am not sure of what you are asking .
How is there more currency exchange risk with Chinese stocks than US stocks if your purchasing power is determined by the prices of goods many of which are made in China? And in what sense are you saying that China and the EU do not regulate their economies? This flies in the face of the often-promoted view that the US is relatively laissez-faire compared with the EU or China.
well if we are talking markets , When all was said and done, the EAFE Index rose 5.3% last year, in local currency terms, but gained just 1.0% in U.S. dollars.
do you think china" accounting standards and economic indicators accuracy are the same as ours ? not on your life!
How is there more currency exchange risk with Chinese stocks than US stocks if your purchasing power is determined by the prices of goods many of which are made in China? And in what sense are you saying that China and the EU do not regulate their economies? This flies in the face of the often-promoted view that the US is relatively laissez-faire compared with the EU or China.
The goods made in china are often often purchased with USD
In the US, American stocks are viewed as lower risk than "international" which lumps together all other nations. In China, they view Chinese stocks as lower risk than all other nations.
Clearly this is a chauvinistic bias on investment decisions and is irrational. How can one allocate investments by country without chauvinistic bias?
This is indeed a bias, but it being a bias does not make it irrational. There are, I think, longstanding structural reasons to believe that when it comes to stock market performance, "American exceptionalism" is not some dumb jingoistic canard. I have long been personally in favor of foreign stocks, and in particular European stocks, for all sorts of biases of my own; but in recent years I have come to regret this view, and to wish instead, that I had a more pro-American bias.
In the US, American stocks are viewed as lower risk than "international" which lumps together all other nations. In China, they view Chinese stocks as lower risk than all other nations.
Clearly this is a chauvinistic bias on investment decisions and is irrational. How can one allocate investments by country without chauvinistic bias?
If it's an irrational chauvinistic bias you should leverage that knowledge to gain superior returns for yourself, and treat it as a trade secret. Once everyone knows the trade secret any advantage will be arbitraged away, and you will no longer be able to gain superior returns from it.
In the US, American stocks are viewed as lower risk than "international" which lumps together all other nations. In China, they view Chinese stocks as lower risk than all other nations.
Clearly this is a chauvinistic bias on investment decisions and is irrational. How can one allocate investments by country without chauvinistic bias?
so how are you looking to allocate your investments? you are looking for an equity fund that is equally weighted among the stock markets of all nations?
If it's an irrational chauvinistic bias you should leverage that knowledge to gain superior returns for yourself, and treat it as a trade secret. Once everyone knows the trade secret any advantage will be arbitraged away, and you will no longer be able to gain superior returns from it.
Precisely. If a legitimate investor was able to recognize irrational behavior in the market, he would try to exploit it, not get on a public forum and broadcast it.
It's pretty obvious that this is not a serious question about investing. When someone uses leftist buzzwords like "chauvinistic" in regard to stocks, they're clearly not interested in investments at all; they're on a "social justice" mission.
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