Home Bias
Categories: Marketing
There’s no place like home. Dorothy Gale thought so, and so do most investors, which is why home bias is a thing.
“Home bias” is the tendency for people to invest in domestic stocks and securities a lot more than they invest in foreign markets, even if those foreign investments might potentially be a lot more profitable.
Why would a person do such a thing? There are a few reasons. First of all, it used to be a much bigger headache to conduct foreign trades. The internet and advances in trading technology have made this less of an issue, but lingering misgivings remain. Second, some investors just prefer to invest domestically. And third, people tend to stick to what they know and hang out in their investment comfort zones. So while many of us would undoubtedly love to travel abroad and have all kinds of fun foreign adventures, turns out we’re a little less adventurous when it comes to sending our money overseas.