International Limits

International diversification sounds smart in theory. In practice, it's complicated.

Global markets have become increasingly correlated. During the 2008 crisis, international stocks fell just as hard as US stocks — sometimes harder. When panic goes global, correlations spike toward 1.0.

That said, international exposure still matters for long-term returns. US stocks dominated the 2010s, but international stocks outperformed in the 2000s. Nobody knows which decade comes next. A reasonable allocation is 60-80% US and 20-40% international.