We have many behavioral biases and the latest data shows that “home bias” is one of them. Home bias is where we invest more of our assets in the country and community we live rather than globally. Becoming aware of our biases, including our home bias, enables us to make more rational personal finance and investing decisions.
The IMF (International Monetary Fund) and MSCI All World Index gathered data from the five largest countries by market size. All five demonstrated a significant home country bias, rather than a global market cap weighted allocation.