It seems as though the holidays are solidly behind us as media heats up with political and economic news. European debt issues continue to make some cautious about investing abroad. Don’t be too quick to overlook investments that may be a good value during times like this.
Understanding the MSCI Indices
Before we get started, I need you to understand something:
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
That doesn’t mean you shouldn’t consider it.
2012 is likely to be a year wherein investors pay much more attention to investing in the U.S. rather than abroad. That may mean value may be found abroad.
To invest in stock right now, especially foreign ones, it helps to decide if you have an interest in long-term growth, basic value, emerging franchises, or consistent earners.
You can get a feel for what this means by educating yourself on MSCI indices commonly used to benchmark international investment returns.
MSCI EAFE (Europe, Australia, Far East) Index – A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. As of May 27, 2010 the MSCI EAFE Index consisted of the following 22 developed country indices: Australia, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
MSCI All Country (AC) World ex-U.S. Index – A market capitalization weighted index representative of the market structure of 44 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim, excluding securities of United States’ issuers. The index is calculated with gross dividends reinvested in U.S. dollars.
Indices such as these are not indicative of any particular investment but can go a long way in educating investors about how foreign securities perform. You may not invest directly into them. You may ask me to ascertain how international investing may benefit you.
Until next week,
Susan R. Linkous
Quote of the Week
“Yes, we have to divide up our time like that, between our politics and our equations. But to me our equations are far more important, for politics are only a matter of present concern. A mathematical equation stands forever.”