The paper shows that it narrows the dispersion and risk of outcomes which is precisely what you would expect and desire from a diversified portfolio. This paper doesn't automatically determine that single-country SWR goes necessarily lower than a mix of local + foreign stocks. The synthetic data comment referred to the paper Ben Felix cited, which Nathan Drake quoted, which I believe is this paper. I have nothing against real historical data. Note that the differences in returns & drawdown in the right hand side should be solely due to local currency performance differences. E.g., an Australian investor investing 100% in Australian equities vs investing in 100% global cap weight equities. I'll just pull out one of the graphs from part 2:ฤก00% local stock market vs 100% global cap weight, real returns vs max drawdown, in the local currency. Does the 50 years of investing in the world series of articles by Siamond help? 50 years of stock & bond data analyzed from the perspective of 16 different countries (analyzing real returns in the local currency).
0 Comments
Leave a Reply. |