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International Portfolio Investment

Author

Listed:
  • Doina Chichernea

    (MBA - Toledo)

Abstract

The focus of this paper is to analyze the feasibility of international portfolio diversification for a potential US investor with a moderate risk aversion. The first section includes the benefits of international portfolio investment with a special emphasis on the diversification aspect. The changes in correlations over different periods are discussed and the investments time horizon importance is stressed. The second section presents the additional costs incurred by maintaining an internationally diversified portfolio, including the risks and constraints involved. The conclusion contains a set of recommendations for a potential investor interested in internationally diversifying his portfolio.

Suggested Citation

  • Doina Chichernea, 2007. "International Portfolio Investment," Journal of Information Systems & Operations Management, Romanian-American University, vol. 1(1), pages 15-20, Winter.
    • Handle: RePEc:rau:jisomg:v:1:y:2007:i:1:p:15-20
    as

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    File URL: http://www.rebe.rau.ro/RePEc/rau/jisomg/WI07/JISOM-WI07-A3.pdf
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    References listed on IDEAS

    as
    1. Jean-Claude Cosset & Jean-Marc Suret, 1995. "Political Risk and the Benefits of International Portfolio Diversification," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(2), pages 301-318, June.
    2. Söhnke M. Bartram & Gunter Dufey, 2001. "International Portfolio Investment: Theory, Evidence, and Institutional Framework," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 10(3), pages 85-155, August.
    3. Nahum Biger, 1979. "Exchange Risk Implications of International Portfolio Diversification," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 10(2), pages 63-74, June.
    Full references (including those not matched with items on IDEAS)

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