I find the part about investors exhibiting home bias particularly interesting. To quote from the article, "Despite the potential loss of performance and higher risk, 54% of our Swiss clients (UBS Wealth Management) who are active investors, still hold more than half their assets in Swiss companies."
I find this statistic about home bias applies to me - and as mentioned in the article, it is mainly due to familiarity with the companies that we're investing in. When my friends ask me about advice for new investors, I often tell them that I started investing in SGX listed companies because I was more familiar with them. Currently, 100% of my portfolio consists of SGX listed instruments.
However, as I get more investing experience, I begin to feel the need to reduce my home bias, and look towards getting wider geographical exposure. Perhaps starting with ETFs exposed to different regions would be a good first step, before proceeding to analysing individual equities.
How many of us here have exhibited home bias, and what do you think can be done to reduce this?
Three golden rules to protect, grow your wealth amid volatility
Martin Blessing. Read more at straitstimes.com.