Should U.S. investors hold foreign stocks?

Kai Li () and Asani Sarkar

Current Issues in Economics and Finance, 2002, vol. 8, issue Mar

Abstract: U.S. investors have traditionally been reluctant to acquire foreign securities_in part, perhaps, because they fear that restrictions on trading in foreign markets will sharply limit any gains they might realize from diversifying their portfolios. An analysis of the effects of one type of restriction, short-sale constraints, on stock returns between 1976 and 1999 suggests that investing in emerging market stocks offers substantial benefits even when a ban on short sales is in place.

Keywords: Investments, Foreign - United States; Financial markets; International finance (search for similar items in EconPapers)
Date: 2002
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