INTERNATIONAL DIVERSIFICATION AND THE EMERGING MARKETS

Year 1995, , 35 - 42, 10.01.1995

Gürel Konuralp

https://doi.org/10.14783/maruoneri.706217

Abstract

The models o f portfolio selection developed by Harıy Markowitz and James Tobin
provide normative rules for the diversification
of risky assets. These models have been extended and empirically tested after their first
presentation; later, intemational diversification
has been added to them. Both institutional and
individual investors are increasingly attempting
to diversify risk by spreading their portfolios
across different national stock markets. This
article reviews the argument for intemational
investment, discusses the risk reduction effect
of correlations between securities and concludes that emerging markets have an important role to play for asset aîlocation.

Keywords

Diversification, Emerging Market

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