Good morning everyone,
For this week's discussion I am focusing on The Great Recession during the late 2000s
The economic decline started when the U.S. housing market went from growth to stop.
and huge quantities of mortgage-backed securities (MBS) and products dropped in
substantial amount. (Investopedia.com) The Great Recession was the most serious
financial recession in the United States ever since the Great Depression of the 1930s.
Extraordinary fiscal, monetary, and regulatory policy was let loose by federal
authorities, which some, but not all, credit with the following rescue.
(Investopedia.com). One reason for this crisis was there were countless monetary firms
taking on too much hazard.
In this particular situation, having other investments in foreign markets might have
helped salvage some of the losses that we taken during the financial crisis. International
investing means holding securities issued by companies or governments outside an
investor's home country. (Chen, 2022). Having a diversified investment market not only
could help with the past but also for future investments.
Maintaining a portfolio that has foreign securities is considered a good long-term
investment strategy because the diversification result that comes from participating in
countries with low cross-correlations can result in both an increase in return and a
reduction in volatility at the total portfolio level over the long term. In other words,
global diversification helps to improve the risk-adjusted performance of the
portfolio. (Fisher, 2012).
References:
Chen, James. (2022, July 14). International Investing. Retrieved from
https://www.investopedia.com/terms/i/international-investing.asp
Fisher, Gregg. (2012, January 17). Why Global Diversification Still Makes Sense
Retrieved from https://www.forbes.com/sites/greggfisher/2012/01/17/why-global-
diversification-still-makes-sense/?sh=7a3f53b64710
Investopedia.com (2022, May 26). The Great Recession Definition. Retrieved from
https://www.investopedia.com/terms/g/great-recession.as