Global diversified strategies provide risk-reducing benefits
Kleintrop argues that correlations in major markets have retreated to levels not seen since 1997, which is great news for savvy investors. In short, some of today’s most lucrative investment opportunities are overseas, and global diversification also provides a way to hedge risk from the volatility in your home market.
In his words, “The return to the lower average correlation across stock markets not seen in 20 years has the potential to offer globally diversified investors the benefit of less volatility without hampering returns on the path to financial goals—in essence decreasing risk without decreasing return.”