Global Diversification

Wai Mun Fong and Benedict Koh

Chapter 29 in Managing Your Personal Finance:From Start of Career to Retirement and More, 2020, pp 191-195 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Dear David,You’ve heard the common refrain that globalisation is bringing countries closer together economically. This begs the question: if the world is getting smaller, does this mean international diversification is unimportant, and investors can simply hold stocks that are traded in their home countries? As a matter of fact, due to a behavioural bias called “the home bias”, most retail investors are already doing that. The home bias refers to the tendency for investors to concentrate their investments in their home countries, thus ignoring the potential benefits of diversifying overseas.

Keywords: Personal Finance; Investment; Managing Money; Retirement planning; College planning; Borrowing; Buying Bonds; Investing in Real Estate; Estate Planning (search for similar items in EconPapers)
JEL-codes: D14 (search for similar items in EconPapers)
Date: 2020
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