Luca Mulargiu @LucaMulargiu: "WHY I DON'T INVEST IN..."

Italy

WHY I DON'T INVEST IN ITALY The Italian stock market represents about 1% of the total market capitalization of global stock exchanges. This figure alone explains a lot: the Italian equity market has an extremely small weight compared to major global markets such as the United States, China, and the broader Asian region. A small market means less liquidity, fewer leading sectors, fewer global champion companies, and—above all—fewer structural opportunities for long-term growth. The second reason is related to country risk. Living and working in Italy means my income already depends entirely on the performance of the Italian economy. In the event of recessions, financial crises or macroeconomic shocks—as happened during the 2011 sovereign debt crisis—the risk doesn’t affect only the markets but also employment, purchasing power and personal economic stability. If, in addition to my job, I also concentrated my investments in Italy, I’d be exposing both my income and my wealth to the exact same risk. This is the key point: concentrating everything in one country means lacking real protection. In a negative scenario, I could face difficulties at work and at the same time see my portfolio suffer heavily. It’s a double exposure to the same risk factor. Investing in international markets, instead, allows me to diversify country risk. Economies don’t move all in the same direction. While one country may go through a difficult phase, others may grow thanks to different economic cycles, fiscal policies, technological innovation or more favorable demographic trends. Geographic diversification is one of the most powerful tools to reduce overall portfolio risk. There’s also a structural aspect to consider: today, global economic growth is largely driven by the United States, Asia and emerging economies. Technology, artificial intelligence, semiconductors, cloud computing, digitalization and energy infrastructure are the real engines of future expansion. Most of the world’s leading companies in these sectors aren’t listed in Italy. Staying confined to such a small market means, in practice, excluding oneself from the main drivers of future global growth. A simple example makes the concept clear. If I invested only in Italian stocks and Italy entered a recession, GDP, employment, consumption and corporate earnings would all decline at the same time. Stock values would fall just as my job situation could become more fragile. By investing globally, instead, an Italian crisis doesn’t automatically translate into a global crisis, and the portfolio can continue to be supported by parts of the world that are still growing. For these reasons, my choice is clear: separating the risk of my job from the risk of my investments and focusing on global diversification, both for protection and for long-term growth opportunities. If you want to start copying my portfolio, you can do so with the amount that makes you feel comfortable. Many choose 10%, others prefer a different percentage based on their own style. Copying can work like an active ETF, offering an extra layer of diversification compared to a personal portfolio. If you want to understand how I work, feel free to message me anytime. Add @LucaMulargiu to your favorites to stay updated on my activities, news, and the educational financial content I share. $TSLA (Tesla Motors, Inc.) $AMZN (Amazon.com Inc) $GOOG (Alphabet) $NVDA (NVIDIA Corporation) $PLTR (Palantir Technologies Inc.)