THINKING OUT LOUD

You are missing out if you only invest in Australian equities

The overwhelming bia and perhaps “comfort” which Australian investors exhibit and seek by either solely or heavily investing in their domestic equity market has proved to be a substandard strategy over the past 20 years.

Larger, developed markets have outperformed the ASX 200 over this greater period of time.

My anecdotal experience whilst being an Australian domiciled stockbroker who focused and specialised in “overseas” equities, from investors who shunned international securities included them telling me that “at last they can drive by and ‘touch’ the company” which they are invested in, or some may have justified their strategy by convincing themselves they could conduct their research more easily by knowing the Australian company better.

I find these type of justifications quite weak and poorly founded.

It’s highly unlikely that an investor in BHP has researched or visited all or most of their sites, offices and operations located in Australia and the same would be the case if one analysed a power, supermarket or healthcare business.

Interestingly, Australians probably use more products and services from overseas corporations than they care to admit.

Whether its Google, Ford, Facebook, Dropbox, Sony, Bayer, Siemens, Netflix etcetera, etcetera……

I fear, that the government “sponsored” or “promoted” programs of negative gearing, franking dividend credits and perpetual money flow into superannuation will continue to allow “local” only biased Australian investors to continue doing themselves an investing disservice for decades to come.