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Friday, May 13, 2011

Country Value Rankings

Below is a the Covered Calls Advisor's current 'Country Value Rankings' table. This table provides a value-oriented perspective that assists this advisor make objective decisions regarding overweighting and underweighting specific countries and regions in the Covered Calls Advisor's portfolio. A comprehensive approach to asset allocation goes beyond diversification solely by asset classes (i.e. stocks, bonds, real estate, commodities, etc.); it should also include diversification by global geography. Behavioral finance research has clearly identified the profound tendency of most investors to succumb to "home-country bias". Also in this regard, legendary investor John Templeton was a leader in advocating the importance of developing a global-oriented value investing perspective to aid us in achieving investing outperformance.






Note: For expanded view, left click on this spreadsheet










The Country Value Rankings table above is based on a weighted-average ranking system. You will notice that there are eight categories (and one factor for each category) used in the analysis of each country as follows:










The next-to-last column on the Country Value Rankings spreadsheet shows the Weighted Average Summation Total for each country. It is interesting that the Top 5 countries are Asian. Thus, new investments in the Covered Calls Advisor Portfolio (shown in the right sidebar of this blog) will be substantially overweighted in these higher rated countries. Also of note is the U.S. ranking of 15th out of the 19 countries rated.

This Country Value Rankings spreadsheet is detailed in terms of both the methodolgy used and the resources used to capture the information for each country. If you are interested in these details and would like further information or clarification, please share your comments and questions in writing. They are always welcomed. Click the 'comments' link below to post your feedback. If you prefer confidential communications, my email address is listed at the top-right sidebar of this blog.

Hope this information is helpful in your thinking about your own equities selection methods in your covered calls investing process!

Regards and Godspeed to All,

Jeff

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