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Global Diversification

In: Managing Your Personal Finance From Start of Career to Retirement and More

Author

Listed:
  • Wai Mun Fong
  • Benedict Koh

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.

Suggested Citation

  • Wai Mun Fong & Benedict Koh, 2020. "Global Diversification," World Scientific Book Chapters, in: Managing Your Personal Finance From Start of Career to Retirement and More, chapter 29, pages 191-195, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811212574_0029
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    More about this item

    Keywords

    Personal Finance; Investment; Managing Money; Retirement planning; College planning; Borrowing; Buying Bonds; Investing in Real Estate; Estate Planning;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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