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Denmark? Why Investing Abroad Contributes to Long-Term Success

J Fitzgerald 2014
Jason W. Fitzgerald, CFP®
Senior Vice President, Senior Wealth Advisor - Team Leader
[email protected]
(585) 419-0670 x50628

Rich Scandinavian culture, clean energy, and the home of LEGOS. To most investor’s surprise, Denmark was the best performing developed market in 2015, up 23% as measured by the MSCI Denmark Index (USD). Hungary on the other hand was the best emerging market in 2015 up 36% as measured by the MSCI Hungary Index (USD). What does this tell us? Most investors would’ve never expected returns of this magnitude from those capital markets, let alone anywhere over in those scary European markets. That spooky place with all of the debt problems.

Lessons Learned from European Markets in 2015

Even after the volatility from last year, the lesson learned from those two markets in 2015, is that good returns can come from anywhere in the world at any time, and most often from places we’d least expect. Each year, different countries, both developed and emerging ebb and flow in and out as top and bottom performers. There’s no reliable pattern as to which will be the best performers in any given year, or which will be the worst. We do know over time, the collective world capital markets offer patient and disciplined investors a nice return premium for staying invested.

Stick to Sensible Strategies

Given the recent volatility to start 2016, we believe the most reasonable and prudent approach is stay disciplined and have exposure to all capital markets throughout the world. We fully admit that we don’t know in advance which countries will be at the top, or which countries will be at the bottom at the end of 2016. We do know that markets reward investors who stick to sensible strategies over time.

As financial journalist Ben Carlson says “Buy and hold only works if you do both when markets crash. It’s much easier to both buy and hold when markets are rising”.

The Experience of CNB Wealth Management

CNB Wealth Management is made up of professionals who spend a great deal of time understanding and working on investor behavior. We know volatility creates a sense of uneasiness but we believe in the tried and true long-term approach to investment management. We work closely with our clients to learn their risk tolerance levels so that we can allocate their assets appropriately to minimize risk for the level of return the client is seeking. Contact us with any questions at 585-419-0670.

This material is provided for general information purposes only. Investments and insurance products are not FDIC insured, not bank deposits, not obligations of, or guaranteed by Canandaigua National Bank & Trust or any of its affiliates. Investments are subject to investment risks, including possible loss of principal amount invested. Past performance is not indicative of future investment results. Before making any investment decision, please consult your legal, tax or financial advisor. Investments and services may be offered through affiliate companies.