Q: Are international stocks too risky?

A: No. Global markets provide diversification and opportunity.

It's true that international stocks have historically been more volatile than US securities; the chart above confirms the wider range of returns. The greater volatility often results from special risks such as fluctuations in currencies, economic and political unrest, and differences in accounting, taxation, and financial standards.

But we feel that international stock indexes (not individual stocks) belong in most portfolios that hold equities. Offering access to burgeoning consumer markets, new business models, and breakthrough technologies — as well as diversification that can smooth overall portfolio returns — we see international securities as simply too important an asset class to ignore.

The question for most investors is not whether to hold international indexes, but how much. That's a critical asset allocation issue that varies for every investor based on financial needs, goals, and risk tolerance.

Next time: Can we really trust perception?

Contact: John Osbon 617.217.2772 josbon@osboncapital.com

Osbon Capital Management, LLC ("Osbon") is an SEC registered investment adviser with its principal place of business in the Commonwealth of Massachusetts. Osbon and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which Osbon maintains clients.

This Q&A contains general information that is not suitable for everyone and should not be construed as personalized investment advice. The historical data presented herein are for informational purposes only and do not reflect actual client accounts.

U.S. stocks in this example are represented by the Standard & Poor's 500®, which is an unmanaged group of securities and considered to be representative of the stock market in general. International stocks are represented by the Morgan Stanley Capital International Europe, Australasia, and Far East (EAFE®) Index, European stocks by the Morgan Stanley Capital International Europe Index, Pacific stocks by the Morgan Stanley Capital International Pacific Index. An investment cannot be made directly in an index. The data assumes reinvestment of income and does not account for taxes or transaction costs.

The historical returns are not net of advisory and/or other fees and expenses. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this Q&A will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

For additional information about Osbon, including fees and services, send for our disclosure statement as set forth on Form ADV using the contact information herein. Please read the disclosure statement carefully before you invest or send money. For information pertaining to the registration status of Osbon, please contact Osbon or refer to the Investment Adviser Public Disclosure web site.