No. of Recommendations: 0
Author: jrr7 Date: 4/12/02 12:52 PM Number: 34166
The reason I see to diversify into international companies id the different regulatory structure that exists in each country.

I agree with this, and, in fact, this may turn out to be the only advantage of holding an international component.

In the past, the movements of international stocks were nearly uncorellated with the US markets, which decreased the volatility of your portfolio. However, in the last 30 years, as the world has moved more and more toward a single 'world economy', the correlation between individual country markets has increased to the point where this diversification no longer gains you much in portfolio stability.

RK
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