Report on International Investing. MSCI EAFE etc

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peteyperson
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Posts: 525
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Report on International Investing. MSCI EAFE etc

Post by peteyperson »

Fidelity report on International Investing, including information on MSCI EAFE etc. Published September 2002.

http://personal.fidelity.com/news/publi ... viewpt.pdf

Petey
caseynshan
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Post by caseynshan »

very informative. Thanks for posting.

although there was obviously an agenda in the report. Figure #5 provides an obvious example as it is showing the largest companies in the world in certain industries. They left off the industry of a little company named wal-mart...
raddr
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Post by raddr »

Petey,

Great link :!:
...an international equity allocation of up to
20% has a virtually 0% chance of increasing volatility
over the short term. Fortunately, this means that
investors who allocate from 5% to about 20% of
their equity portfolios to international stocks need
make no hard decisions about whether to prioritize
long-term optimization or short-term volatility
reductions. Allocations in this range help smooth
long-term volatility in the same way - albeit to a
lesser degree - as the larger allocations. For this
reason, investors may want to think of an allocation
to international equities in the range of 5% to 20%
as a starting point, which can be adapted to different
risk tolerances, time horizons and market.


I think that the 5-20% "starting point" allocation should be a no-brainer for most investors. This is a classic example of the "free lunch" that proper asset allocation can provide.
peteyperson
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Posts: 525
Joined: Tue Nov 26, 2002 6:46 am

Post by peteyperson »

Thanks for the praise. I only glanced at the report as I'm enjoying reading ' How to Retire Early and Live Well ' by Gillette Edmunds (excellent and should have been read before more complex works like Four Pillars. The first book that actually goes thru which asset classes are correlated (not immediately as obvious as you might imagine).

The report looked like something that would appeal to the FIRE crowd if you can avoid the marketing slant. :lol:

Petey
raddr wrote: Petey,

Great link :!:
...an international equity allocation of up to
20% has a virtually 0% chance of increasing volatility
over the short term. Fortunately, this means that
investors who allocate from 5% to about 20% of
their equity portfolios to international stocks need
make no hard decisions about whether to prioritize
long-term optimization or short-term volatility
reductions. Allocations in this range help smooth
long-term volatility in the same way - albeit to a
lesser degree - as the larger allocations. For this
reason, investors may want to think of an allocation
to international equities in the range of 5% to 20%
as a starting point, which can be adapted to different
risk tolerances, time horizons and market.


I think that the 5-20% "starting point" allocation should be a no-brainer for most investors. This is a classic example of the "free lunch" that proper asset allocation can provide.
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