7Mon·

S&P 500: too much USA risk? 40% of turnover comes from abroad!

Consensus opinion: "With the S&P 500, I only invest in the USA. That's far too risky for me as I'm only invested in one country."

In truth: 40% of the turnover of companies in the S&P 500 comes from abroad.

$CSPX (-1.21%)
$SPY (-1.06%)

4 Comments

Epi@Epi

7Mon

The argument "SP500 = only USA" has many more and more differentiated views than "40% turnover exUSA". E.G: Taxes, exchange rate effects, refinancing costs, financial market access, investor structure. Some things are advantageous, others are not. And it changes over time.

Anyone who only focuses on the USA is simply violating a central basic rule of investing: diversification!
This is what the criticism of 100% SP500 is really about.

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Basti92@BavarianLion

7Mon

@Epi And that's exactly why I decided against an S&P 500 ETF and went for the $VWRL instead! It also has a lot of USA in it, but in my opinion it's a bit better!

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KingC@RaphGM

7Mon

The GDP of the USA accounts for around 26% of global GDP.
Now, doing 60% of your business with 26% of the world's GDP is not what I mean by diversification.

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Klingsohr@Klingsohr

7Mon

@RaphGM Well, currency diversification also plays a role for investors. If the dollar depreciates, the euro loses value for us. However, since the devaluation of the dollar is a desirable effect of his policy for the man in the White House, for example, there is a risk here that should be dampened somewhat. In addition, the earnings of many American companies are already heavily dependent on the domestic economy: if there is a weakening of consumption, for example, then this will also be felt. So my opinion: USA, yes - but somewhere between 45 and 60% of the portfolio

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