Investing in foreign shares is one way to improve diversification of a portfolio.

Question

Quizplus · Accepted Answer

Investing in foreign shares can help to reduce the concentration risk of a portfolio that is heavily invested in domestic stocks. It provides exposure to different markets and sectors, which may perform differently than the domestic market and provide a hedge against domestic economic risks. However, investors should conduct thorough research and understand the risks associated with investing in foreign markets, including currency fluctuations and geopolitical instability.

Investing in Foreign Shares Is One Way to Improve Diversification