Sharesight shares who is (and isn’t) choosing the most popular ASX and US stocks of 2021

Meanwhile, across the Atlantic, investors who were looking for reassurance as a tonic to global uncertainty turned to profile and publicity, as demonstrated by the continuing attractiveness of media-darlings Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL), as well as Gamestop (NYSE: GME), AMC Entertainment (NYSE: AMC) and Blackberry (NYSE: BB), which all peaked earlier in the year on the back of influential social media commentary.

And interestingly, there was more than just a trending tweet that GameStop and Tesla had in common; they were both also the most-sold shares among Sharesight users.

In terms of tech stocks, users concentrated their trading on long-standing favourites Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT).

Overall, it was a year of strong returns for US markets, with stocks bouncing back to pre-pandemic levels on the back of elevated domestic stability and confidence.

Who’s making local vs global investments in Australia and the US?

Upon closer examination of the data, an interesting difference emerged when Sharesight users in the US and Canada were compared to those in Australia, New Zealand and the UK:

• 98-99% of North American investors only invest in their own domestic markets.
• Conversely, over 17% of NZers, 19% of Aussies and 21% of investors in the UK invest in markets outside their own.

So why the extreme reluctance by those in Canada and the US?

It’s a fact that the American markets are the largest and most diverse in the world, so those investors might be excused for not feeling the necessity to investigate opportunities further afield. It could also be argued that, as many North American companies operate internationally, investors feel they’re embarking on a de facto global diversification even if they are still only investing locally.

But whether it’s for those reasons or any others, the clear trend is that US and Canadian Sharesight users overwhelmingly prefer to trade in entities and brands that they know, in stark contrast to users elsewhere who typically are more active in venturing into equity and debt markets located beyond their own shores.

But does staying almost exclusively local mean missing too many opportunities elsewhere? Does a lack of an international appetite increase the exposure to risk? And which mindset sits most comfortably with you when it comes to balancing returns with diversification?

Sharesight’s CEO Doug Morris added, “Time and time again, we see investors favour their domestic markets, nowhere is this more pronounced than in North America where we see investors in Canada and the US almost exclusively investing in their local markets. We always recommend investors look closely at their asset allocation across different industries, sectors and geographies with tools like Sharesight’s Diversity Report.”

Source: https://australianfintech.com.au/sharesight-shares-who-is-and-isnt-choosing-the-most-popular-asx-and-us-stocks-of-2021/