The Region With the Best Equity Return Varies From Year to Year
Where to invest can be a difficult decision for investors. For some, the comfort of a particular country or region may drive their investment choices, creating a portfolio with an inherent “home bias.” This bias leaves the potential for an investor to miss out on more fruitful investment opportunities. Since 2006, U.S. stocks have had the strongest returns for four years and emerging markets stocks for three, with the other regions having the best returns for two years each. A diverse equity asset allocation across regions (global diversification) may help investors capitalize on broader investment themes that transcend their preferred region.