With the recent interconnectivity of the world’s stock markets proven by the 9% decline in China’s major exchanges heard—and felt—around the world, it is becoming apparent that investors looking for international diversification might just be getting more of the same, The Wall Street Journal reports.
As Jack Ablin, CIO of
Of course, local events and currency differences will still affect local markets differently in the long term, but in the short term, they are going to more in lock step more frequently, Ablin said.
As international markets continue to blend, investors are likely to embrace other choices, such as commodities, hedge funds, private equity and, for the time being at least, small-cap companies in emerging markets.