Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Bridgewater Associates’ Research Report – Geographic Diversification Can Be a Lifesaver

Billionaire Ray Dalio’s Bridgewater Associates has just released three research reports – Geographic Diversification Can Be a Lifesaver (which you can download below), Peak Profit Margins? – A US Perspective (track down here), and Peak Profit Margins? A Global Perspective (download here). In Geographic Diversification Can Be a Lifesaver Research Report, the fund examined the disadvantages geographic concentration carries with.

The best way we know to earn consistent returns and preserve wealth is to build portfolios that are as resilient as possible to the range of ways the world could unfold. To uncover vulnerabilities that are outside of investors’ recent lived experiences, we find it valuable to stress test portfolios across the various environments that have cropped up across countries throughout history.

One common vulnerability is geographic concentration. In the past century, there have been many times when investors concentrated in one country saw their wealth wiped out by geopolitical upheavals, debt crises, monetary reforms, or the bursting of bubbles, while markets in other countries remained resilient. Even without such extreme events, there is always a big divergence across the best and worst performing countries in any given period. And no one country consistently outperforms, as outperformance can lead to relative overvaluation and a subsequent reversal. Rather than try to predict who the winner will be in any particular period, a geographically diversified portfolio creates a more consistent return stream that tends to do almost as well as whatever the best single country turns out to be at any point in time. So geographic diversification has big upside and little downside for investors.

Geographic diversification is likely to be more important in the coming decades than it has been in our lived experience as investors. Through most of our working lifetimes, countries’ economies and markets have become increasingly intertwined due to globalization and the free flow of capital, under the auspices of the US as a dominant economic force and keeper of a stable global geopolitical order. Looking ahead, China’s ascent as an independent economic and financial center of gravity with an independent monetary policy and credit system is highly diversifying, making the world less unipolar and less correlated. At the same time, the rising risk of conflict within and across countries also increases the chances of divergent outcomes. Additionally, geographic diversification felt less urgent during the recent decade of great returns for most assets and portfolios. Low asset yields going forward make diversification and efficient risk-taking all the more important to investors.”

You can download a copy of Bridgewater Associates’ Research Report – Geographic Diversification Can Be a Lifesaver  here:


DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.