Q: How do exchange rates impact international stock returns?

Facebook’s looming initial public offering will mint a new generation of Silicon Valley millionaires on a level not seen since 2004, when Google went public. In this Portland Business Journal guest column, Vista’s Dougal Williams explains why Facebook’s new rich would be wise to learn an investment lesson from their Silicon Valley neighbor.

Q: What’s your take on Employee Stock Purchase Plans? I have an opportunity to participate in my company’s ESPP, but don’t quite know the details of how they work. Should I participate?

Contrary to one market pundit’s prediction that 2011 would be an “easy year for stock pickers,” last year turned out to be pretty tough for active managers. Fully 84% of U.S. stock funds failed to keep pace with their index benchmarks. After factoring in taxes, however, results were even worse.

High quality international government bonds have historically provided similar levels of returns to those of U.S. Treasury bonds. Importantly, their safety shines when investors need it most—during times of extreme stock market distress. Unfortunately, no suitable mutual fund existed to allow investors low cost and diversified exposure to this important asset class. Until now.