One of the most common pieces of investing advice shared online today is this:
"You should invest in US stocks."
At first glance, the advice makes sense. The United States is home to some of the world's largest companies. Investors gain exposure to global businesses, innovative technologies, and a market much larger than our own.
But as a small Filipino investor, I often find myself asking a different question:
Do I really need US stocks right now?
The answer may surprise many investors.
The Appeal of US Stocks
There are legitimate reasons why investors want exposure to the US market.
Companies such as Apple, Microsoft, Amazon, Google, and Nvidia have created enormous wealth for investors over the years. The US market also offers thousands of investment choices across different industries.
Another advantage is currency diversification.
If the Philippine peso weakens against the US dollar, investments denominated in dollars become more valuable when converted back into pesos.
This is why many Filipino investors dream of eventually building an international portfolio.
The Reality for Small Investors
While the benefits are attractive, the reality is often different.
Many small investors face practical challenges:
- Limited investment capital
- Foreign exchange conversion costs
- Funding requirements
- Additional account setup procedures
- International transfer fees
For someone who is still building an investment portfolio, these obstacles can make foreign investing difficult.
As a result, many investors feel discouraged because they cannot immediately participate in international markets.
But perhaps they are asking the wrong question.
A More Important Question
Instead of asking,
"Why don't I own US stocks?"
perhaps we should ask,
"Am I consistently accumulating assets?"
After all, a person with a ₱2 million portfolio of quality Philippine investments may be financially stronger than someone with only ₱50,000 spread across various international markets.
The key is not where your investments are located.
The key is whether your assets are growing over time.
Building the Foundation First
When constructing a house, nobody starts with the roof.
The same principle applies to investing.
Before worrying about international diversification, investors should focus on building a solid financial foundation.
This often includes:
- Creating an emergency fund
- Eliminating high-interest debt
- Developing a regular investing habit
- Building positions in quality companies
- Reinvesting dividends
These fundamentals contribute more to long-term wealth than simply owning foreign assets.
Philippine Stocks Are Not Inferior
A common misconception is that investing locally is somehow inferior to investing abroad.
While the US market has many advantages, the Philippine market also contains quality businesses.
Banks continue to serve a growing economy.
REITs generate rental income.
Consumer companies sell products used every day.
Utilities provide essential services.
Investors who carefully select strong businesses can still build meaningful wealth without leaving the Philippine market.
The objective is not to choose between Philippine and US stocks.
The objective is to own productive assets that can grow and generate income over time.
Diversification Can Come Later
This article is not a criticism of US investing.
In fact, I believe international diversification is beneficial.
However, diversification becomes much easier after an investor has already developed saving and investing discipline.
A small investor who regularly saves and invests can gradually build a separate fund for future international investments.
There is no need to rush.
There is no need to feel left behind.
And there is certainly no need to sell quality holdings simply because others are chasing foreign markets.
The Danger of Investment Envy
Social media has created a new problem for investors: comparison.
We see screenshots of foreign portfolios.
We read about record-breaking stock gains.
We hear stories about people investing in companies we cannot yet afford.
Over time, this creates investment envy.
Instead of appreciating the progress we've made, we focus on what we don't have.
But successful investing has never been a race.
The investor who steadily accumulates assets year after year will often outperform the investor who constantly jumps from one trend to another.
Final Thoughts
Do small Filipino investors need US stocks?
Eventually, perhaps yes.
Today, not necessarily.
The first priority should be building the habit of saving, investing, and accumulating productive assets. Whether those assets are located in Manila or New York becomes a secondary concern when compared with the discipline required to build wealth.
International diversification is a worthy goal.
But before we diversify globally, we must first learn to invest consistently.
After all, wealth is not created by owning investments from many countries.
It is created by patiently owning good investments for a very long time.
For most small investors, the challenge is not gaining access to the US market. The challenge is continuing to invest, month after month, year after year, regardless of where the market happens to be.
