Investing globally

In our office we often speak of the value of diversification and why it does not make sense to radically over-concentrate on what is close and familiar.  Sir John Templeton was a pioneer in global investing, having started the Templeton Growth Fund in 1954.  When we construct portfolios for your long term goals you will almost invariable see that your assets have been diversified among a number of companies who may operate globally and also among companies based in many foreign countries.  It makes sense, but few Canadians actually adhere to this principle, preferring to emphasize investments they see in the daily news of Canada.  For them, familiarity breeds comfort even when it means avoiding the many great investment opportunities available worldwide.

“It seems to be common sense that if you are going to search for these unusually good bargains you wouldn’t just search in Canada.  If you search just in Canada you will find some, or if you search just in the United states you will find some.  But why not search everywhere? That’s what we’ve been doing for forty years. We search anywhere in the world.”

Sir John Templeton, November 1979

“Research shows that a stock portfolio with investments around the world is likely to yield, in the long run, higher returns at a lower level of volatility than a simple, diversified, single nation portfolio.”

Sir John Templeton, July 1994