It would be unreasonable to expect our exceptional GDP growth to continue indefinitely. And there are international markets from which to choose whose economies are just entering economic upswings. The point is that growth and inflation rates will change over time in all countries. Our country is no exception to this rule. Management of foreign companies doesn t care about small shareholders.
Share ownership is increasingly common in the world s advanced nations.
The reasons for this have included a desire to make different types of financing available to the nation s corporate sector. Additionally, shareholder activism, which can benefit small as well as large shareholders, is becoming increasingly common in a growing number of economies. This means that, in the case of any downturn, these markets would probably react in a very similar fashion. Other markets Japan and Italy are just two examples are historically less highly correlated with our equities. As a result, portfolios, which own stocks in these and other less correlated markets, may prove to be steadier in the event of a decline in the values of American equities.