So Much For Diversification!

At least, that’s my conclusion from this chart/table via the NYT‘s Floyd Norris:

“Whatever else you might want to say about the virtues of international diversification, in this cycle it has done little to balance the risks of investing in any one market. When the markets went down, they nearly all went down. When the markets rose, they soared together.

If history is a guide, the strong recovery may be an indication that better prices are still ahead. Since World War II, there have been eight periods before the current market when the S.& P. 500 managed to rise at least 30 percent over a half-year period — in 1963, 1971, 1975, 1980, 1982-83, 1991, 1997 and 1999. A year later, the index had made further gains in seven of them.”

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0912-biz-webCHARTS

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Source:
Around the World, Stock Markets Fell and Rose, Together
FLOYD NORRIS
NYT, September 11, 2009
http://www.nytimes.com/2009/09/12/business/12charts.html

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