David John MarottaDavid John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com
Host: What is the EAFE Index?
David Marotta: The MSCI EAFE Index stands for EAFE Europe, Australia and the Far East and it represents all of the foreign stocks outside of the US, in developed countries except Canada. So a lot of advisors will invest in US stocks, they will invest in the EAFE and then they may buy Canada specifically just to sort of round out all the developed nations. The developed countries outside the US generally earn a percent or two more than US stocks but they are also more volatile.