The face of international investing is changing.
There is no connection between where a company is headquartered and where it makes its money.
Using an example cited in The Wall Street Journal, Novartis AG is headquartered in Switzerland and Johnson & Johnson is based in the U.S., but they're both global healthcare companies. Johnson & Johnson generates 52% of its sales outside the United States. Novartis generates 67% of its sales outside the United States.
Most U.S. companies make the majority of their profits on foreign soil. According to Ned Davis Research, as of December 31, 2011, 52.6% of pretax profits for companies in the Standard & Poor's 500 index came from outside the U.S.
Of the roughly 14,000 companies that went public over the past decade, more than 90% of them are outside the United States.
Conclusion: We live in an increasingly global world where one cannot be insulated from international economic events. The best growth opportunities exist on a truly global basis. As with all investment themes, a long-term perspective and patience is required for success.
About Bruce J. Berno, CFP®
Bruce J. Berno, CFP® is the founder of Berno Financial Management, Inc. a fee-only comprehensive personal financial planning and investment advisory firm headquartered in Cincinnati, Ohio. Since 1993, Berno Financial Management has been helping individuals and families achieve financial peace of mind. For more information about Berno Financial Management, visit http://www.bernofinmgt.com.
Friday, August 31, 2012
How Does Your 401(k) Compare?
Do you ever wonder how the balance in your 401(k) and how much you are contributing to your retirement accounts compares to the rest of the working world?
According to Fidelity Investments, the nation's largest 401(k) administrator:
Over the past 10 years, about two thirds of annual increases in 401(k) account balances have come from workers' contributions and company matches, with one third the result of investment returns.
What the moral of the story?
The amount you contribute matters more than the investment returns.
Your contribution probably needs to be larger than the percentage matched by your employer.
About Bruce J. Berno, CFP®
Bruce J. Berno, CFP® is the founder of Berno Financial Management, Inc. a fee-only comprehensive personal financial planning and investment advisory firm headquartered in Cincinnati, Ohio. Since 1993, Berno Financial Management has been helping individuals and families achieve financial peace of mind. For more information about Berno Financial Management, visit http://www.bernofinmgt.com.
According to Fidelity Investments, the nation's largest 401(k) administrator:
- The average balance among its nearly 12 million shareholders was $72,800 at the end of June 2012.
- The average employee contribution for the latest quarter was $1,660, up $30.
- The average employer contribution was $950, also up $30.
- The average employee contribution in Fidelity-administered 401(k) plans has remained steady at around 8% of annual pay for the past three years.
Over the past 10 years, about two thirds of annual increases in 401(k) account balances have come from workers' contributions and company matches, with one third the result of investment returns.
What the moral of the story?
The amount you contribute matters more than the investment returns.
Your contribution probably needs to be larger than the percentage matched by your employer.
About Bruce J. Berno, CFP®
Bruce J. Berno, CFP® is the founder of Berno Financial Management, Inc. a fee-only comprehensive personal financial planning and investment advisory firm headquartered in Cincinnati, Ohio. Since 1993, Berno Financial Management has been helping individuals and families achieve financial peace of mind. For more information about Berno Financial Management, visit http://www.bernofinmgt.com.
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