Broaden your mind, and your investment portfolio
By Holly Black, Morningstar
“Are you local?” was the question asked many a time in by Tubbs in League of Gentlemen.
It’s a question you should ask of your investment portfolio, too. Of course, Tubbs was trying to keep non-locals out of her strange village, whereas you should likely be thinking more about opening up the borders of your portfolio to the wider world.
It’s no surprise that the majority of people have “Home Bias” in their portfolio – that is, we have the majority of our assets invested in our domestic stock market or home-grown bonds. Us humans are creatures of habit and we crave the familiar. We want to invest in stocks we already know and love, it makes them easier to understand and often it makes us feel as though we own a small slither of a brand we identify with.