7IM Short Thoughts: No Place Like Home

Everyone at 7IM’s London office is working from home this week as we change location. Very exciting. But it got me thinking about home. As humans, home is really important to us, really emotionally important. Everyone knows the relief at getting home after a long, stressful day. But home, it turns out, is also really important in our investment portfolios.

If you look at the chart on the screen, you can see the difference between markets around the world, as part of the global equity market, and how much investors in those countries put into their portfolios. So looking at Australia, 2% of all global equities are Australian, but Australian investors put more than half of their portfolio there. Even in the United States, which is 70% of the global market already, investors put another 15% in, taking US equity to 85% of their portfolios.

Now, we learnt a lot from COVID, but one of the things we learnt was that you can have too much of a good thing. Being at home all the time isn't great, and we should apply that to our investment portfolios as well.