After the last several years of trailing performance we have heard from many investors questioning the continued efficacy of investing in international equity. We specifically tackled the topic in our early January Blog post Does Diversification Still Work? We stated that while it certainly had not worked out recently, over time diversification still makes sense and we still believe in it.
With the completion of the first quarter you can see why. The US stock market had a fantastic quarter, rising 5.74%, however international stocks performed even better. The total international market gained 7.92%. While it certainly is too early to declare victory for foreign stocks over US stocks for 2017, it has clearly been beneficial to have an allocation to international stocks for the year to date.
We fully expect there will be times when foreign stocks outpace and when US stocks outpace. However, it is impossible to know beforehand which will be in favor and for how long. By maintaining exposures to both asset classes, and avoiding the temptation to time the markets, it provides a smoother ride for your investment portfolio.
|Index Performance||March||1Q||Trl 1 Yr|
|US Stock (Russell 3000)||0.07%||5.74%||18.07%|
|Foreign Stock (FTSE AW ex US)||2.56%||7.92%||13.85%|
|Total US Bond Mkt. (BarCap Aggregate)||-0.05%||0.82%||0.44%|
|Short US Gov. Bonds (BarCap Gov 1-5 Yr)||0.05%||0.39%||-0.13%|
|Municipal Bonds (BarCap 1-10yr Muni)||0.12%||1.55%||0.21%|
|Cash (ML 3Month T-Bill)||0.02%||0.10%||0.36%|
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