Technical Analysis 101: Home Country Bias and Investing in the Global Stock Market

Join Kate Stalter as she discusses investing in the global stock market to counteract the "home country bias" of developed-economy investors.


In today’s video, Financial Freedom Federation’s technical analysis expert Kate Stalter discusses the composition of the S&P 500 index and “home country bias,” the tendency of investors in developed nations to overemphasize their own domestic equities in their portfolios. She explains that, for U.S. investors, that bias is muted as U.S. equities comprise 50% of global equity markets and are highly diversified by sector, while investors in Canada are overweighted towards financials, minerals, and oil and gas. Kate then highlights two ETFs, the iShares MSCI EAFE ETF (EFA) and the iShares MSCI Emerging Markets ETF (EEM), as potential jumping-off points for investors interested in increasing their global stock market exposure. Lastly, Kate discusses the potential technical basing of emerging markets and discusses the historical relative performance of emerging market equities as an asset class. The ETFs discussed in this video are used for the purpose of a broad discussion on global stock market investing and should not be considered recommendations.

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