Peter Canniff, a CFP and owner of Nashua, N.H.-based Advanced Portfolio Design, has noticed a steady increase in opportunities for overseas investment along with clients’ willingness to include international investments in their portfolios.
Today, the average investor has become much more receptive to including international assets in their portfolios.
When Canniff began in the business in the mid-nineties, his typical portfolio might have included 10% to 15% international investments. By the late 1990s, that portion had increased to between 20% and 30%. “These days, at least 30% of portfolios should be allocated to international investments, depending on how aggressive the investor is,” Canniff declares. “I’d like to see maybe almost as much allocated to non-U.S. equities as allocated to U.S. equities.”
But it wasn’t always this way. “It used to be that you couldn’t get a heck of a lot of diversification because 90% of the stuff to invest in was here anyway,” he recounts. “When I started in the business in 1994, about 80% to 90% of the world stock market was concentrated in the U.S. Somewhere around 2006, the rest of the world surpassed the size of the domestic stock market and now there’s a much larger share of stocks around the world outside of the U.S.”
That’s changed dramatically. While other countries were once viewed as more risky politically or as having currency or economic issues, “Today, it’s become much more transparent and sensible to invest outside the U.S.,” Canniff says. “It used to be looked at as risky to be invested internationally; now I look at it as risky not to be invested internationally. There are 200 countries around the world and it’s silly to think that most of your money should be in just one.”