Broaden Your Mind, And Your Portfolio

Editor's Views: Why do we allow home bias to creep into our investment portfolios when we pride ourselves on being so broad-based in the rest of our lives? 

Holly Black 30 October, 2020 | 10:32AM

Editor

“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.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

 

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