The Other Kind of Diversification

I was appointed the finance correspondent for Senior Life Advisor, an online magazine for investors near or in retirement. The articles for Senior Life Advisor were designed to offer actionable information as well as items of interest about economics, investing and personal finance.

Conventional wisdom suggests that your stock portfolio should include international stocks.  Without question this idea has merit.  Does that mean you have to buy European or Asian stocks or buy an international stock fund?  That’s one way to go.  

But you can also achieve so-called “global diversification” simply by purchasing U.S. companies that derive a large portion of their revenues overseas.  Boeing, for example, an uber-industrial company generated about 56% of its total 2018 revenues outside of the United States.  

The primary benefits to this strategy are the reduction of unfavorable currency changes, transparency in financial disclosures, and in most cases greater access to U.S. legal protections.  Compare this to a large Chinese conglomerate that reports to Chinese regulators, has seen the value of the renminbi decline, and is beholden to a justice system quite different than Boeing’s.  

Source: 

Page 108, https://www.sec.gov/ix?doc=/Archives/edgar/data/12927/000001292719000010/a201812dec3110k.htm

More Posts

5 Special Situation Stocks for Growth & Income

This article was written with Louis Navellier, founder and chief investment officer of asset manager Navellier & Associates. It was part of a series of articles developed under an agreement with Kiplinger negotiated by me to designate Mr. Navellier as a contributor and to deliver original articles for them on a regular basis.

Read More »

More RIA Consolidation Ahead

This is an editorial I wrote for Advisor Perspectives concerning the increasingly prominent role private equity capital plays in the RIA M&A landscape which was highlighted in a 2023 M&A conference held by Gladstone Associates.

Read More »
Scroll to Top