FA Center: Dear Adviser: Are U.S. stocks and bonds safer than foreign investments?

Dear Adviser:

My client noticed that his portfolio has a lot of international stock- and bond mutual funds. He asks: “Why do I need international investments at all? Don’t I get that from U.S. companies doing business abroad? Isn’t it safer and better to own stocks at home?” What compelling argument can I make to him?

Tom in Massachusetts

Owning a variety of investments lowers portfolio risk and boosts overall return.

Dear Tom:

I would frame your client’s question with another example that is easier to answer: Isn’t it safer and better to own the stocks of only the largest U.S.

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