To see your stocks go up 10% an get happy when Brazil is up 30% Gold up 30% etc you are actually falling behind. Seems to make sense to me.
In the last 6 months Brazil is basically flat, UK (FTSE 100) is down 15%, China (Shanghai composite) is down 45%. Goldman-Sachs BRIC international mutual fund is down 13%.
In a recession, cash is king. In a global recession, a diversified currency portfolio is king.
Long term though, international funds should do fine. I’ll even say that the days of average 10% returns of S&P are over, from now on the U.S. stock market will yield its role to emerging markets. Americans don’t have the education, the willpower or the potential of China or Brazil. I would not be too shocked to see S&P and Dow show the same performance over the next 15 years as Nikkei showed over the last 15.
