"Global Investments" Please respond to the following:
Construct an argument for the average investor to consider diversifying into international markets.
Reilly and Brown (2012) identify three viable reasons to diversify an investment portfolio with foreign financial market offerings: 1) Restricting yourself to only U.S. offerings eliminates over 50 percent of the currently available investment opportunities. The growth and development of these foreign markets in the past 20 years has led to this point. Eliminating foreign investment opportunities from your portfolio may eliminate some great options to diversify and balance your risk. 2) Emerging foreign markets have led to a higher rate of return for foreign investments, on average. Eliminating these as an option also eliminates the opportunity for a higher return. A chart published by the Schwab Center for Investor Research with data provided by Ibbotson Associates and later published on the web in an article written by Michael Schmidt (n.d.) illustrates this higher return over historical periods:

3) With the option to select foreign investments that possess a very low market correlation to U.S. investments, the potential to obtain investments that balance and lower the portfolio risk should not be ignored. Michael Schmidt (n.d.) again provides an illustration, this time regarding the low long-term correlation between U.S. and International stocks:

For me, the opportunity to earn a greater return is enough to convince me to invest. In fact, my current portfolio does include a percentage of foreign investments. The opportunity to diversify and lower risk, for me, is an added bonus. The world has become more connected and with it comes an opportunity to benefit from another country’s growth. However, the benefits are not without special risks. The SEC (n.d.) points to 7 distinct risk