One of the biggest misconceptions in investing is that domestic markets are somehow safer and better than investing abroad. For whatever reason, many of us believe that owning stocks and bonds in the U.S. is the best way to go. As a result, this causes many investors to be overweight stocks in their local markets.
Dubbed “hometown bias”, this could be costing investors a lot over the longer haul. After all, in today’s global economy, you’re just as likely to drive a Toyota (TM ) motorcar or use a drug developed by pharmaceutical giant Sanofi (SNY ). However, investors are essentially leaving some big profits and big-name companies on the table.
For dividend-focused investors, those profits could be even greater. There are plenty of reasons why income seekers and dividend-hunters may want to breakout their passports and go overseas.