A nineties perspective on international diversification
DOI:
https://doi.org/10.1016/S1057-0810(99)00028-1Abstract
Investors often look to international diversification as a means to reduce the risk of a stock portfolio while maintaining a given level of return. In this study we look at ten years of historical data from the stock markets in the G-7 countries. We see how diversification from an S & P 500 portfolio into a two-market (two-country) portfolio would have impacted the risk and return. Across this ten-year period, we find that a portfolio consisting solely of the S & P 500 dominates any portfolio that can be constructed from the S & P 500 and the major market index of the G-7 countries. © 1999 Elsevier Science Inc. All rights reserved.
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