Review & Outlook

Our take on the investing, financial, & economic themes of the day

International Investing

6 October, 2010 by admin in Philosophy

O’Brien Greene & Co. tends to participate in international markets indirectly through the activities of the American companies it invests in. Thus the firm might own the common stock of Coca-Cola, which has extensive operations around the world, but the firm would not set out to own the stock or the bonds of an independent soft drinks company based, say, in Asia.

There are several reasons for this focus on America. One is regulatory oversight. America has the most extensive and effective securities regulation in the world Also, American accounting standards, which are predicated on accuracy before all other values, are the most dependable in the world.

Our favored direct approach to international investing is through the use of transparent, low-cost and tax efficient exchange traded funds (ETFs), which we use to complement our core stock holdings. In selecting country funds, we overweight countries with faster growing, more stable economies. Many individual country funds are heavily weighted in the stocks of leading companies within the country, which provides a vehicle for owning leading international stocks that might otherwise be more difficult to obtain.