Diversification by Country

New Zealand is great country, but opportunities for investors don’t stop at the border. Building a globally diversified portfolio is a way of ensuring you’re not overly dependent on one market or economy.  The United States and New Zealand had two of the top performing share markets in the world last year, Russia was one of the worst and Australia was so-so. Which will it be in 2015? The answer is nobody really knows, because whilst there are plenty of opinions about relative economic strengths, the economy and share market performance do not necessary move in tandem.  

The table to the below provides a snapshot of countries that had the best and worst performances over the 5-years to December 2013.

High and Low Markets.JPG

The chart in the button below provides a review of developed market returns in much more detail over 19-years.  The second button below provides a link to a very good column by Larry Swedroe, about why being globally diversified makes so much sense.