grown. Locally sourced. These days it is all about going local. But
what about investing? Can a portfolio be locally sourced? Is it a good
Bryan Sadoff of
Sadoff Investment Management says that in southern Wisconsin, it is
possible to build a locally sourced investment portfolio because the
area is blessed to have a diverse group of publicly traded companies
with significant revenues beyond the borders of our community. But he
warns, "when one builds an investment portfolio, one should be
diversified across stocks and industries — financial, industrial,
retail, consumer, staffing and auto companies, to name a few."
Sadoff says that
there are significant risks to limiting a portfolio to local stocks.
"One risk is that if some major event happens in the area that
negatively impacts the community and leaders of these companies, these
stock prices could fall worse than the market, especially in the
someone is adamant about investing locally, they could build a
diversified portfolio, but it is not something Sadoff would recommend.
"The local companies may not be the better companies in their
respective industries or indexes. For example, we own MGIC, but our
screening process did not involve a search based upon where their
headquarters are located," he says. "We simply did our
research, and we like the stock."