Oversea's funds

[cletis]

I've heard alot about how oversea's countries are still growing quite rapidly. Why is it that my oversea's funds have tanked as bad or worse than what I have in the states? Cletis

[Rich_by_the_Bay]

Quote:

Originally Posted by cletis I've heard alot about how oversea's countries are still growing quite rapidly. Why is it that my oversea's funds have tanked as bad or worse than what I have in the states? Cletis

... and some day they'll outpace your domestic equities by a mile.

For me it's about diversification. It's a good thing when some things are up and some things are down. That is, assuming you're looking to get your fair share of the market with reasonable volatility rather than make a killing on one particular sector.

[CitricAcid]

Maybe the growth in the stock market in the first place did not match the actual growth in the companies in the funds? It has not been proven or is not necessary to believe, but most say that international funds and companies are much mroe volatile and risky, which tend to lead to better returns over the long run, because they are not as established and widely traded as American companies. Without the downside risk, what is there to be risky about them?

[Marquette]

Just because a company is growing doesn't mean that it's stock won't be risky. People sell when they panic. People sell if they think the company won't grow as much. People sell if it's Wednesday. If you're facing a global cooldown, forward sales won't be as strong, which means you price the bad news into the stock and sell.

[LOL!]

The value of the companies in your overseas funds have gone up. It just that your American dollar has gone down and only buys a fraction of what it used to overseas.

That is, overseas funds have not only market risk, but also currency risk.

[Marquette]

Quote:

Originally Posted by LOL! The value of the companies in your overseas funds have gone up. It just that your American dollar has gone down and only buys a fraction of what it used to overseas. That is, overseas funds have not only market risk, but also currency risk.

But in that case the value should have also increased. If I own something at $100 but my dollar drops, then I sell it and get dollars back so maybe I get $125 back just for having something hold its value.