Question

Your textbook discusses investing internationally as an important tool to diversify your portfolio. Do you think now is a good time to invest internationally? If you were to invest internationally, what countries or industries do you think are good to invest in right now? Reply

Answer 1

Yes, this is a good time to invest in International stocks , as amidst the Corona Virus scare, there has been rampant selling in international markets which has brought most of the stocks at a very attractive valuations. So, investing right now, will not guarantee desired returns initially and as soon as this scare subsides the markets are expected to return back to their original level and there has been speculation that the global economy will grow by 2.5% by the end of 2020.So, these attractive valuations will translate into positive and superior returns of the international stocks in comparison to the US stocks. Hence, the international stocks will outperform the US base stocks. The international stocks are more sensitive to the projected global growth than the US stocks.

Emerging  markets is a good time to invest in internationally. The Asian markets except China could be a good bet right now.