There's no place like home, they say. And when it comes to investing, that may be true. Home Country Bias is the tendency for an investor to prefer companies from their own country or region. Such investors may overweight their exposure to domestic stocks.That's not necessarily a bad thing. After all, you probably know more about your own country's economy than you do about others'. And if you're comfortable with the political and economic stability of your home turf, that can give you an extra level of confidence in your investments.But there are also risks associated with home country bias. If something goes wrong in your own backyard – say, a recession or a financial crisis – then your portfolio is likely to take a hit as well. So it pays to diversify beyond your home market and invest in other countries as well. That way, if one market hits a rough patch, you've got some cushioning from other markets around the world.
