USA, Love It or Leave It

March 24, 2006 - Of course I'd never entertain leaving the United States. I am a loyal American; a proud citizen who loves our country deeply and profoundly. I count my blessings that I was born and raised in this wonderful country that, in my opinion, is the world's greatest.

Nevertheless, when considering long-term investment planning, we should look beyond our shores. Today, the majority of world's capitalization is invested abroad in companies and economies ranging from our own corporate giants such as Coca Cola, to the stocks and bonds of both mature and emerging markets. To put all one's investment eggs in the US "basket" is to ignore that fact. A well diversified portfolio should not exclude some percentage of investments in countries other than our own.

Perhaps the most potent illustration of this is the chart of annual returns for 1996-2005 ranked in order of performance (Source: MSCI.com). You need only look at the figures to see how important it may be to include non-US investments in your portfolio.

"Leaving" the US, refers only to broadly diversifying your portfolio by adding investments in other countries, keeping in mind that we are part of truly a global economy, a fact that should not be ignored.

To be an American is a very great privilege, and perhaps Theodore Roosevelt may have defined it best when he wrote these words nearly 90 years ago in 1917.

"Americanism means the virtues of courage, honor, justice, truth, sincerity, and hardihood-the virtues that made America. The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living and the get-rich-quick theory of life."

So love it, don't leave it; just add to it!

Please Email bob@cfsias.com with your questions.

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INSIDE FINANCE will appear regularly, addressing financial matters of interest to our readers. Any questions? Email bob@cfsias.com

If you wish to review your investment portfolio, please contact me for a complimentary consultation: bob@cfsias.com 973-826-8800. Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member NASD/SIPC. Cambridge and CFS are not affiliated.

The preceding article is for informational purposes only and should not be used as the primary basis for an investment decision. Indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results. All examples given are hypothetical and do not reflect actual investments. There may be additional risks associated with international investing such as: currency risk, economic and political risk, and differences in accounting practices. Consult your advisor to consider your risk tolerance before investing internationally. The views expressed in this article are those of the author and are not necessarily those of Cambridge. Bob Jaffe is Managing Director of CFS Investment Advisory Services, LLC in Totowa and has been a Clifton resident since 1984. Active in community affairs, Bob is Past Board Chairman of the North Jersey Regional Chamber of Commerce and president of its foundation board. He serves as a commissioner on the Clifton Rent Leveling Board and is Vice President of the Clifton Rotary Club. Representatives of Cambridge do not offer tax or legal advice. Consult a professional for your personal situation.