Hulbert: International Stocks Render The To The Lowest Degree Protection Merely When Investors Ask It Nearly

From MarketWatch, Oct 9, 2018 6:47 p.m. ET:

Diversifying portfolios away from USA stocks is important, but non a cure-all

USA stocks’ functioning so far this yr offers a perfect illustration of why investors should non exaggerate the benefits of international diversification.

When the USA stock marketplace plunged to a greater extent than than 10% inwards belatedly Jan as well as early on February, for example, international stocks lost fifty-fifty more. Far from cushioning the autumn for investors, they made things slightly worse.

When the USA stock marketplace over again cruel sharply, betwixt Mar. ix as well as Apr. 2, international stocks as good fell. Though this fourth dimension they didn’t autumn as much as USA equities, the cushion they did render was scant comfort.

In both cases, international diversification did non alive upwardly to its advance billing as providing a “free lunch” of reducing portfolio volatility spell forfeiting real footling render inwards the process.

To hold upwardly sure, these ii instances past times themselves add together upwardly to footling to a greater extent than than anecdotal evidence. But it turns out that, historically, what happened inwards these cases is to a greater extent than the dominion than the exception.

What as well as so accounts for the “free lunch” narrative that is widely associated amongst international diversification? Because, on paper, such diversification is supposed to run a lot better: Even though international stocks present relatively footling correlation amongst domestic stocks, their render over the long term is quite similar. H5N1 portfolio divided every bit betwixt domestic as well as international stocks should thus create the same render as a domestic-only portfolio but amongst significantly less volatility.
The telephone substitution give-and-take is “should.”

The work is that the correlation betwixt domestic as well as international stocks is non constant. It instead shifts amongst the bull as well as behave bicycle of the marketplace itself: The correlation is lowest when the USA marketplace is rising, as well as highest when USA equities are falling....MORE

And from Slope of Hope a await at the activeness inwards the iShares MSCI Emerging Markets ETF:

1 twenty-four hours agone (09, October 2018 11:02:33 AM)
Emerging Support?

Just to shift gears, I’ll offering something somewhat bullish (although I don’t hateful it for a second).
The emerging markets, mentioned hither incessantly on Slope, convey been extraordinarily chart-able for 2018. That’s evidently to encounter from the tints I convey provided below. At the moment, my optic is on that yellowish since, which for the 3rd twenty-four hours appears to hold upwardly providing support.

MORE Today the ETF is downwardly some other 2.24% (-0.9143) to $39.84 putting the EEM some amount blown capitulation.
H5N1 skillful matter for those who convey resisted the the entreaties of the property allocators (this time)