Hi all, here is a quote from a recent video I saw where Larry Swedroe was asked about using International Stocks to add diversification. I would like your comments:
“I believe that you should diversify (internationally) because we don’t have a clear crystal ball, but we must recognize that the world is getting smaller…
So the correlations of US and International markets have risen…
So you still want to diversify (internationally) because it’s just logical. But you now need other sources of risk to enter the portfolio because international is not as effective a diversifier. It’s still effective, it still adds value. Just not as much as it used to.”
Larry’s full comments are at 19:40 in the video: https://youtu.be/QxIK8RCGfVQ?si=96wJXCHbCgQrt6bK
What other sources of risk is he referring to? And is added diversification necessary to a market weighted global stock portfolio?
“I believe that you should diversify (internationally) because we don’t have a clear crystal ball, but we must recognize that the world is getting smaller…
So the correlations of US and International markets have risen…
So you still want to diversify (internationally) because it’s just logical. But you now need other sources of risk to enter the portfolio because international is not as effective a diversifier. It’s still effective, it still adds value. Just not as much as it used to.”
Larry’s full comments are at 19:40 in the video: https://youtu.be/QxIK8RCGfVQ?si=96wJXCHbCgQrt6bK
What other sources of risk is he referring to? And is added diversification necessary to a market weighted global stock portfolio?
Statistics: Posted by TrustTheMarket — Mon Dec 30, 2024 1:04 pm — Replies 0 — Views 82