Chapter 9. The New Global Investing Strategy
"What do they know of England who only England know?"
When I first came to this country, in the mid-1970s, international investing was in its infancy, and was considered unnecessary, risky, and even unpatriotic. It was considered a strange concept, especially for retail investors. For many years, I and a small band of other zealots used to give speeches on "the benefits of international investing."
To me, it was startling that an investment advisor believes he has need to answer the question, "Why invest abroad?" and even more so that the question should be asked at all. In England, whence I hail, it is quite usual for a well-rounded investment portfolio to be diversified internationally, just as it is diversified among investment vehicles, among sectors, and among individual companies. A British investment advisor would just as likely recommend U.S., Dutch, and Hong Kong stocks as he would British. The same is true of continental Europe. A Swiss banker who suggested to a foreign client that he place all his assets inside Switzerland would not stay in business very long. This is also true for much of the world.
It is perhaps peculiarly American that the question is asked and need be answered. John Pugsley calls the typical reluctance of Americans to look abroad a "natural consequence of their heritage." Partially, of course, this derives from the sheer size and—certainly until recently—the dominance ...