Then there's the cost of owning the Janus fund. It's dearly not the cheapest way to invest in non-US markets, with an expense ratio of 0.89%. And if you sell it within three months of purchase, you will be punished by a 2 % early- withdrawal fee.
I'm not arguing for or against the Janus fund. You can't dispute its performance or the need for owning non-US stocks mat are initially bought at discounts.
At this point, the grown-up talk about evaluating potential pitfalls comes to mind. Is it worth taking on the additional risks of a single manager, foreign currencies, small companies and the stock market all at once?
With small, foreign companies, you may have a greater chance of bankruptcy if their local economies weaken. And there's always the wild card of currency fluctuations. A rising dollar would lower the, relative value of these stocks.
The question should be how much risk you can afford, said Larry Swedroe, director of research at St. Louis-based Buckingham Asset Management and author of "The only guide to a winning investment strategy you'll ever need.” Swedroe said those people whose livelihoods are hurt most by slumping economy may want to have reduced positions in small-cap stocks relative to investors who have stable incomes that are less affected by economic swings. Applying that observation, doctors, teachers and government employees may be better able to invest more in small-value companies than stock brokers, real-estate agents, construction workers and individual business owners, Swedroe said.
"The important thing to understand is that small and value are independent risk factors and you need to diversify across that, he said, "Those investors with a high correlation of their earned income to the economic cycle should consider limiting their exposure to small and value stocks.” - Bloomberg .
I'm not arguing for or against the Janus fund. You can't dispute its performance or the need for owning non-US stocks mat are initially bought at discounts.
At this point, the grown-up talk about evaluating potential pitfalls comes to mind. Is it worth taking on the additional risks of a single manager, foreign currencies, small companies and the stock market all at once?
With small, foreign companies, you may have a greater chance of bankruptcy if their local economies weaken. And there's always the wild card of currency fluctuations. A rising dollar would lower the, relative value of these stocks.
The question should be how much risk you can afford, said Larry Swedroe, director of research at St. Louis-based Buckingham Asset Management and author of "The only guide to a winning investment strategy you'll ever need.” Swedroe said those people whose livelihoods are hurt most by slumping economy may want to have reduced positions in small-cap stocks relative to investors who have stable incomes that are less affected by economic swings. Applying that observation, doctors, teachers and government employees may be better able to invest more in small-value companies than stock brokers, real-estate agents, construction workers and individual business owners, Swedroe said.
"The important thing to understand is that small and value are independent risk factors and you need to diversify across that, he said, "Those investors with a high correlation of their earned income to the economic cycle should consider limiting their exposure to small and value stocks.” - Bloomberg .
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