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We are often asked about “the market,” and people are always referring to either the Dow Jones Industrial Average or the S&P 500 when they ask that question. But there are other stock markets and many more stocks that can be invested in, outside of the stocks represented in those two indices. The graphic below depicts the stocks in other major global indices. As you can see, while the US is by far the largest overall market, there are many other major participants. The Dow Jones Industrial Average and the S&P 500 do not even represent the entire US stock market! |
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We are global investors so we can capture the intellectual and material resources all over the world. The major world indices represent 5,408 stocks, but even that is far below the more than 12,000 stocks available to investors. Why does this matter? Markets tend to operate in phases. There can be stretches of time, often several years, when US markets underperform international markets, and the opposite is true as well. Investors have a greater probability of long term investing success if they invest beyond “the markets” that are covered in the US press. As you can see the Dow Jones Industrial Average, which you hear about on the news all of the time, is literally the tip of the iceberg!! |
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