If your Equity Portfolio is not globally diversified, you're taking undue risk which may not payoff

Points to ponder while taking investing in equity:

1. Do you travel to foreign countries like the US, UK, Japan, Switzerland, etc.?
2. Do you send your kids abroad for education?

Shouldn't you balance your equity exposure to Indian and Foreign stocks/ Mutual Funds/ ETFs/ FoFs?

Reasons for the globally diversified equity portfolio:

1. Reduces country-specific risk

Country specific risk includes negative events such as

war,
drought,
political turmoil, etc.

2. Winners keep rotating

Winners keep rotating frequently
Predicting them in advance is impossible
Reduce the risk of our investors losing out when the Indian stock market underperforms

3. Reducing Portfolio Volatility

All stock markets do not always move at the same pace or same direction
Investing across countries helps to reduce the volatility of the portfolio
Lower fluctuations in the portfolio which also helps in better good night's sleep

4. Wider choice

Several world-class companies do not have listed Indian subsidiaries
Innovative companies making certain products/ services having no Indian substitute
Chance to benefit from the performance of global leaders

5. Valuations

The Indian subsidiary of a multinational company may be highly valued hence less investment-worthy
The parent company may be available at a reasonable valuation

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You may contact us in case you need to ask or tell us something.

With respect,
Aaditya Chhajed

E: aadityachhajed@acfas.in
M: +91-9404055222

You can connect me on Instagram at @chhajedaaditya

Aaditya is the founder of Aaditya Chhajed Financial Services.

He loves helping family, friends, and, clients make better financial decisions. He believes learning is perpetual.

He is a commerce postgraduate and Chartered Accountant. He has also cleared all levels of CFA(US) in the first attempt.

Disclaimer:
Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. This post is not a recommendation to buy or hold or sell securities. Investments are subject to market risks. Please read all investment-related documents carefully.

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Aaditya Chhajed, CA, CFA

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