International Conundrum

| May 21, 2019
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When you study asset allocation and diversification there is always a sleeve for International stocks as they historically diversified a portfolio of only US stocks and improved overall returns.

Well that what the text books say!

It is not always what actually happens.

Adding even the smallest amount of meaningful exposure to International stocks over the past 10 years, actually:

  • Reduced Returns
  • Increased Volatility

BlackRock has researched this anomaly.

Over the past 10 years ending 04/30/2019, a portfolio of 100% US stocks returned 15.32%, while a portfolio of 95% US stocks and 5% international stocks returned 14.97%.

Concurrently, a portfolio of 100% US stocks experienced volatility of 12.44%, while the 95/5 portfolio had a volatility level higher at 12.47%.

Strange but true!

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

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