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Retirement Planning with Global Equities

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Introduction to Retirement Planning

Without the defined pension plans that were available in the past, it is more important than ever for Americans to make plans for generating and managing adequate income during retirement so that they do not outlive their savings. For most people, Social Security provides less than needed income, necessitating private savings for financial security. Generating adequate retirement income requires ongoing decision-making and adjustments over the life of the investor. Therefore, consulting with an investment professional can be critical to achieving adequate savings for retirement. This article will discuss retirement planning issues and demonstrate the benefit of adding global equities to your asset allocation.

Retirement Planning Starts with Asking Yourself Tough Questions

First, how much do you spend monthly/annually?

Creating a budget is crucial to understand your spending and plan for your desired retirement lifestyle. We would add that since the pandemic, household debt levels have risen significantly. High debt levels make saving for retirement very difficult. Having a budget and sticking with it will help you make sure you’re saving enough to meet your long-term goals as well as to reduce debt.

Experts advise saving at least 15%, or more, of your annual income throughout your employment years. Investing in a taxed deferred account through your employer or an IRA is highly advantageous. When it comes to retirement planning, however, the more you can save, the better, even in a taxable account. A lengthy investment time horizon enhances return potential through the principle of compounding, thereby assisting in achieving your goals.

Third, how should you allocate your portfolio?

In our blog article dated 4/29/2024, we cited a study that disclosed 91.5% of a portfolio’s return is attributable to asset allocation. The article delves into various asset classes, allocation strategies for portfolio optimization, and discusses asset correlations to enhance diversification.[1]

The concept behind asset allocation is to optimize returns while minimizing portfolio return variance through diversification. Investors can smooth portfolio earnings by investing in asset classes and securities, where gains in one offset losses in another. Your portfolio allocation hinges on your risk tolerance, years until retirement, and planned major expenditures necessitating cash distribution. Continuously adjusting asset allocation is essential for maximizing investment returns, as it is not a static measure. Having a professional investment manager customize your portfolio will assist you keep on track for retirement.


The Role of Global Equities in Retirement Planning

A Global Equities portfolio includes stocks from both U.S. and international markets, unlike an international portfolio limited to non-U.S. stocks. Global equities investment managers, including Hemispheres, commonly use the MSCI All Country World Index as their benchmark. The index contains 23 developed markets and 24 emerging market countries. All these markets have regulatory oversight of their listed companies. The United States stock market has a weighting of 63.2% of the index as of the end of January 2024.

Participating countries in global stock markets have distinct regulatory, political and monetary policies affecting shareholder returns and providing enhanced diversification. With 47 markets and 10,000+ companies, global equities offer extensive return opportunities. The United States, by comparison offers 2,000+ companies with comparable market capitalization.

Hemispheres Investment Management is a multi-cap, value style investment firm. To determine value, Hemispheres performs extensive fundamental analysis on each security in which we invest. Hemispheres mitigates investor risk, through a disciplined, repeatable process as detailed in our March 18, 2024, article.  Additionally, our April 8, 2024, article delves into wealth building via long-term investment strategies with global equities.[2] 

Hemispheres Global Equity versus S&P 500 returns

  8-year average return % Value of $50,000 initial investment + $500/month saved over 8 years
Hemispheres Global Equities 15.22% $260,435.09
S&P 500 13.22% $227,689.79
MSCI Global Value Index 8.46% $166,436.36
Source: PortfolioCenter, Bloomberg

Most investment managers do not actively follow emerging markets, which are part of global equities. A low correlation to U.S. markets suggests significant diversification benefits from this asset class. Lack of analyst coverage provides increased opportunity to enhance investment returns.


We recognize that individual and institutional investors alike may be new to investing in Global Equities. There are complexities and nuances associated with investing in various markets that require expert guidance. Investing in Global Markets can provide both returns and diversification benefits to our clients and therefore we urge investors to explore long-term investment financial objectives and explore how Global Equities can play a pivotal role in achieving your goals. Hemispheres Investment Management’s team of seasoned professionals have a 35-year track record of managing successful investment strategies, emerging markets investing in particular . The Global Equities product is Hemispheres flagship product.

Please contact Hemispheres Investment Management for a free consultation. We provide guidance and strategies to assist you optimize your investment policy and help you achieve your investment goals. Book a meeting