Maintaining the Flow: Will Foreign Stocks Help Your Retirement Portfolio?
by Carl M. Hubbard
Until recently, the ability of internationally diversified portfolios to outperform U.S.-only portfolios after adjusting for risk has been a foregone conclusion. But recent published research on international diversification questions the risk-reduction effects of international stocks.
This issue has important implications for all individual investors. But it uniquely affects retirees who are living off of their retirement savings because of the impact it may have on the amount of money they can safely spend each year.
For retirees, the important issue in this discussion is whether investing in foreign stocks can improve their portfolio performance enough to allow them to safely withdraw more from their retirement portfolio each year.
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