Can We Predict Which Countries Will Perform Best?

Looking into Global Diversification

By Michael Foster

We at DCA believe global diversification is incredibly important. While we are a US-based business with primarily US-based clients, we also realize the merit in spreading out capital across markets.  

Many names we encounter in our daily lives are non-US based companies. If our investments hold Ford and GM, would we also not want to invest in Toyota and Honda? How about Samsung and Sony in addition to Apple and Microsoft? As I’m writing this, I’m drinking from a Nestle water bottle and listening to background music on Spotify, both international companies.  

It’s also incredibly difficult, if not outright impossible, to predict what markets will do better than others. Dimensional Fund Advisors has a great chart which shows returns of developed markets over the last 20 years ending 2021. When looking at this chart, I struggle to see any sort of pattern that would lead me to feel confident making predictions on who would perform better than someone else. One thing that sticks out to me is that Denmark had the highest return over the period of the countries listed. The US, despite several strong years coming out of the great recession finished 6th overall. The results get even murkier when adding in emerging markets countries where we also invest.

Source: Dimensional Fund Advisors

In conclusion, we at DCA have a strong belief in global diversification. We don’t pretend to know where returns will come from and want to make sure our clients are able to capture them where they appear. Enjoy the article from Dimensional below.

Which Country Will Outperform? Here’s Why it Shouldn’t Matter.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data are historical and are no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Nothing in this material should be construed as investment advice offered by Dolan Capital Advisors, Inc. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction, or investment strategy. No chart, graph, or other figure provided should be used to determine which securities to buy, sell or hold. No representation is made concerning the appropriateness of any particular investment, security, portfolio of securities, transaction, or investment strategy. You should speak with your own financial professional before making any investment decisions.

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Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance, or events to differ materially from those expressed or implied in such statements.

Ben Dolan and Michael Foster are investment advisor representatives of Dolan Capital Advisors, Inc., a SEC-registered investment adviser. Investment advice offered through Dolan Capital Advisors, Inc.

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