Rule #5: Reduce your risk by diversifying your investments internationally.
Familiarity Is A Poor Basis For Investment
Home bias1 afflicts almost all investors, of all shapes and sizes. It’s the tendency to invest in firms that are close to home in preference to firms that are far away. This is true in both a geographical and a mental sense, and the net effect is that many portfolios are unsafe, under-diversified and unbalanced. A bit like most of us investors, really.
