International Diversification Works (Eventually)
Posted: 11 Jun 2011
There are 2 versions of this paper
International Diversification Works (Eventually)
Date Written: June 9, 2011
Abstract
Critics of international diversification observe that it does not protect investors against short-term market crashes because markets become more correlated during downturns. Although true, this observation misses the big picture. Over longer horizons, underlying economic growth matters more than short-lived panics with respect to returns, and international diversification does an excellent job of protecting investors.
Keywords: equity investments, equity market valuation, return analysis, international equity investing, portfolio management, portfolio construction and revision, diversification issues
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