Global Equity Investing: The Benefits of Diversification and Sizing Your Allocation


In light of quantitative analysis and qualitative considerations, domestic investors should consider allocating part of their portfolios to international equities. In determining how much to allocate between domestic and international equities, a helpful starting point for investors is global market-capitalization weight. In practice, many investors will consider an allocation below this starting point based on their sensitivity to a number of considerations, including volatility reduction, implementation costs, taxes, regulation, and their own preferences.

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