When it comes to global investing, clients and their advisors often have varied concerns. From home-country bias to political instability, here are their most pressing worries.

1) Duncan Rolph

Managing Director, Miracle Mile Advisors


Clients inherently understand the benefits of global diversification yet they are increasingly concerned by the growing underperformance of non-US investments, especially with emerging markets (which are down over 15% from the S&P 500 this year alone). They are also getting fatigued by the steady stream of macro events whether it is Cypress or North Korea that have a negative impact on their portfolio. One client recently quipped, “Now I have to get up early and watch CNN and FOX International in addition to CNBC to know what is going to happen to my portfolio in a given day.” It doesn’t seem worth it.


Global investing is inherently more complicated in today’s more volatile market environment and there is an increasingly greater number of variables that will impact outcomes. In addition to geo-political headlines, we are seeing simple shifts in monetary policy move markets as exhibited by Japan up over 35% this year. Asset bubbles can pop up in currencies, geographies, and in specific asset classes as we have seen in China’s real estate market and require us to expend more time and resources in our due diligence and research.

2) Anita Brown

Senior Vice President and Wealth Management Advisor, Beverly Hills Wealth Management


Concerns regarding political stability and currency stability in selected global debt.


I would mirror my clients concerns, however I select a basket of global equities AND global debt within an overall asset allocation reflecting both the clients’ objectives, age and income requirements and timing.

3) Lucinda Alden

Wealth Management Advisor, Beverly Hills Wealth Management


Many of my clients have a financial background so they have the same concerns. All my clients look to me to help them make sense of the reports that  come daily from the news outlets and to protect their investments.


My top concern is whether the accounting is being done correctly since stock and bond values are all derived from those numbers. In the U.S. we have been trying to refine and improve our methods for decades and we still have problems arise. I can only imagine the issues that will come to light eventually in other countries that have significantly less experience with investors through stock markets. We already started to see the issue with poor accounting by a number of Chinese companies that were traded publicly on US markets.

4) Ryan Wibberley

Founder, CIC Wealth Management Group


The biggest concern I hear from clients about investing overseas is generally related to European countries. The Eurozone is under a monetary union composed of 17 member states, which are so drastically different that it's almost impossible for them to agree on major issues. You have Germany on one hand that runs its affairs in a conservative manner, while another country like Greece has rampant corruption and a government that can't get its financial house in order. There is a lot of fear out there that the European Union will eventually fail and it's hard to invest in the region.


I share my clients’ same top concern.

5) Maury Fertig

Advisor, Relative Value Partners


The primary concern from clients centers around Europe and China. The headlines from the Eurozone are still negative despite improving markets and what appears to be a bottoming of their economies. China has raised concerns due to the steep market decline and ‘bubble’ talk. The comfort in the domestic market is increasing since volatility has dropped and the price seems to only go up! I stress that some asset allocation to non-US global companies carry similar risks to US companies that do business globally. It also adds to diversification across markets and currency.


My top concern primarily centers around periods of time when global market may significantly underperform the US market which can cause an overall drag on performance. The top issue is a concern that euro-zone economies may not catch up to the recovery in their markets which would lead to another severe drop. 

6) Steve Lockshin

Chairman, Convergent Wealth Advisors


Clients are typically short term focused and home country biased. So, their question is "why even invest overseas?"


We have no long term concerns about overseas investing. In fact, we believe emerging markets are poised to be excellent performers.

7) George Papadopoulos

Founder, Fee Only Wealth Management


When it comes to investing, my passive investment management style utilizing very low cost Vanguard ETFs is definitely not sexy! I tell my clients to focus on what they can control. We are sticking to the diversified asset allocation plan we have and we rebalance at regular intervals. Since I am a dual US Greek citizen they do enjoy my views about Europe and Greece more specifically. What happened in Greece was not a shock; what was shocking was that the Greeks managed to put off the day of reckoning for so many years.


My top concern is that the European politics get out of control and mayhem ensues. I can tell you that the Greek society is almost to the verge of breaking. I am hopeful and still confident that at the end of the day the European Union and euro will figure it out and survive. I can also tell you that I am not as confident as I used to be a few years ago after watching European leaders fumbling the ball so often.

8) Jim Cahn

Chief Investment Officer, Wealth Enhancement Group


Clients understand the benefits of global investing (the diversification benefits, enhanced return in EM, etc.), but in their head they tend to benchmark their own portfolios against the S&P 500 or other well-reported U.S. indexes. Our clients' main concerns tend to be not with international investing but with the underperformance of their own portfolio relative to major U.S. market indexes when the international components lag U.S. performance. It's a challenge for the advisors to explain that the risks associated with these short-term lags are worth taking in exchange for the long-term benefit from international investing.

Clients often believe that returns follow economic performance; in fact, there is very little data linking stock market returns with the performance of the economy. So while places like Europe and Japan look relatively inexpensive, investors are scared off by the headlines associated with negative or slow growth. As a result, clients are very concerned about going into markets where valuations and often future returns actually look the most promising.


One of our top concerns in international investing is currency valuations. While in Yen terms the Nikkei index is up 47.77%, in dollar terms it's up less than half that. And although that's still a great return, should the Yen collapse further, the gains could be completely wiped out for a dollar-based investor. Currency considerations are even more important when considering global fixed-income investments, as currency fluctuation can eliminate the benefit from higher yields.

Emerging markets look really cheap relative to developed markets, possibly for one of two reasons: 1) the market is right and emerging market growth will slow considerably because of inflation, geopolitical factors, and poor infrastructure; or 2) the market is wrong and emerging market stocks are really cheap and are likely to be the best performers given current valuations. We are not certain which of these is the case, but valuations as such make it tempting to increase our allocation to emerging markets.

9) Mag Black-Scott

CEO, Beverly Hills Wealth Management


If clients are investing in a large company, they have very little concern. If they’re investing in smaller companies – which may have more opportunity – it is a risk issue, especially after the situation in Greece, and with France in double dip recession and Germany getting the staggers.


Unanticipated events – earthquakes, tsunamis, military coups, rogue states.  Even without those taking place, global investing does spread investment risk. 

10) Dave Abate

Senior Wealth Advisor, Strategic Wealth Partners


Unfortunately, we have discovered a number of clients still want to wear their “performance chaser hat” and the fact is that non-U.S. equities have significantly underperformed U.S. stocks over the trailing 3-year period (about 5% annualized lag). This “rearview mirror” mentality combined with many U.S.-based investors’ natural aversion to investing overseas due to their unfamiliarity can become a large obstacle to overcome.

Our prescription for this condition is to educate. We want our clients to understand the thought process behind our portfolio construction decisions.  In addition to the obvious diversification benefits, our research tells us that in light of the recent underperformance, the going-forward overseas 5-year outlook looks considerably more attractive relative to the domestic opportunities in front of us.


Although we don’t anticipate this as a likely scenario and it’s not included in our baseline negative scenario model – if Europe completely falls apart – meaning if there were a run on the banks – this could trigger one or more countries to exit the Eurozone. A legitimate depression could ensue coupled with permanent loss of capital for investors. Obviously, not a pretty picture.

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