Question

Critically Discuss the following comment: "i have no interest in investing internationally. The u.s. market has...

Critically Discuss the following comment:

"i have no interest in investing internationally. The u.s. market has outperformed international markets in many years. because virtually no combination of international investments can outperform a solely u.s. investment portfolio, i wil not diversify internationally."

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Answer #1

US market is a developed market and returns might diminish in future. So it is better to diverisfy it with investments in devloping makets like Brazil, India, Turkey, China and other countries. Such diversification can help in getting good returns even if there is slowdoun in USA. It can hedge the risks of returns in USA.
Other international markets like Europe has very stable growth and this minimises the risk of invetsment in USA. Certain markets are not highly correlated with USA market . Such markets can provide benfits of diversification by providing high retuns and also limiting risks.Hence Diversification in International Markets should be done.

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