The best possible way of achieving international diversification is to invest in United States companies having a large share of their business coming from foreign investment.

Question

Quizplus · Accepted Answer

This would still be a U.S. company even though they have foreign investment income. One of the benefits of foreign investing is that not all foreign markets move in the same direction across time, so a diversified portfolio consisting of stocks from many countries will have less volatility than a purely domestic portfolio of stocks and could even have a higher rate of return.

The Best Possible Way of Achieving International Diversification Is to Invest