Global Allocation Revisited
Asset allocation is the key framework to construct a balanced portfolio that meets investment goals. Global allocation advocates that international stocks and bonds are important assets that can diversify risk while keeping or improving returns.
Unfortunately, in the past 10 years since the last recession, international stocks (including emerging market stocks) have been more harmful than helpful to a portfolio. In fact since 2010, there was only one year (2017) when VEA (international stocks) (the second row in the following table) returned more than SPY. Similar underperformance of VWO (emerging market stocks) to SPY can be observed:
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