Why Not Diversify Internationally Rather Than Domestically?
The purpose of this article is to show that substantial advantages in risk reduction can be attained through portfolio diversification in foreign securities as well as in domestic common stocks. The primary motivation in holding a diversified portfolio of stocks is to reduce risk. The risk of a portfolio in terms of variability of returns will be less than the risk of its separate parts. Obviously, the greater the number of securities in a portfolio, the less the p0rtfoli 0 is likely to lose as the result of one company's misfort