What is international diversification
Other People Are Reading
The purpose is to find investments that will move in the opposite direction of the domestic investments, whether it is stocks, real estate or other types of investments. This way, if the value of the stocks decline in the home country, they could be expected to increase in the international country or countries.
During the financial crisis of 2008, professionals observed that portfolios with international diversification did not protect investors for risk. This leads to a series of debates on the effectiveness of international diversification. The basic rule is that in the long run, international diversification is an effective means of diversifying risk. However, it does not protect the investor as well if there is a global crisis.
Emerging countries are considered the top choice for diversifying risk since they do not follow the same cyclical patters as industrialized nations. When looking at countries to diversify risk, also make sure that there is political stability so that an effort to reduce risk in the home country is not counterproductive by bringing in additional risks.
More Like This
The Advantages of International Portfolio Diversification
The Correlation of REITs to the Stock Market
The Average Salary of an International Banker
You May Also Like
The Advantages of International Portfolio Diversification. The underlying reason for a diversified portfolio is that it is typically less risky than a.
The concept of political risk in international business is based on the existence of possible threats to the firm from political instability.
If you've ever heard the old adage about "not putting all of your eggs in one basket," you're already well acquainted with.
Diversification can be used with many types of investments, and it allows the investor to still earn a profit, or limit her.
Portfolio diversification is an essential component of disciplined investment. Every investor expects to profit from his investments, but the factors of risk.
This article will show you how to minimize and deal with political risk when investing.
While there are plenty of investment opportunities in the United States, some investors look to invest in stock, bonds and real estate.
The main method for reducing investment risk is diversification. By spreading your investments among several asset classes such as stocks, bonds and.
Most people have neither the time nor interest to research and select individual stocks and bonds for their investment portfolios, and that's.
View Blog PostSource: ehow.com