Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Regarding pauleckler's comments on international equities not being a good diversivication choice for US equities, I agree that as time goes on these two groups seems to be moving more and more in step with each other. More so than they had in the past. I still believe, however, that they are a better diversification choice for say, large US equities than US small equities.

I wish I could remember where it was that I saw it but there is an interesting graph showing correlation of US equities (S&P500 I think) with EAFE. What was shown was that the correlation hasn't been monotonically approaching 1 over time but had moved in cycles. This strongly suggests that international equities can and do have a good diversification effect. The chart may have been in one of Bernstein's books (either one William or Peter) or maybe it was somewhere else. Anyone?

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.