Elroy Dimson

People did do that from the United States.

It was a little bit more difficult to do from Canada, but those impediments were lifted because people were convinced that global diversification was worthwhile.

There were opportunities like that, but it cannot be the case that there is a strategy which makes money for everyone

So in other words, when Americans put their money outside the US, they were buying stocks which were destined to underperform American stocks.

What that means also is that if Europeans or Asians had moved out of their home markets and bought more in the US, they would have bought more.

The average return experience across all of them has to be zero.

You can't create returns out of nowhere.

So the role of international diversification is risk reduction, and that you can promise.

Some of it may of course be not rational, just warm feelings, but there may also be other attributes to that.

My answer to some extent is covered by taking an institutional investor perspective.

I'm employed by one of the wealthier universities in Europe, which is Cambridge.

And Cambridge, when it hires people, has a mix of paying salaries, which are the going rate locally and will stay that way.

and some where the going rate is essentially determined globally.

The decision as to how much you want exposure to foreign markets compared to local markets, it is something where there isn't a rule that applies to everyone.

I think there are individual circumstances which will finesse what you ought to be doing.

I do understand home buyers.

For those who have a heavy bond component, I think the story is more compelling, as is being able to diversify out of your home bond market into foreign bond markets is taking a view on how exchange rates are going to change.

I'm in favor of diversification however it comes, but I can see how for fixed income investors, it's a little bit more important because you can hedge more effectively

When it comes to the stock market, I still have some sympathy with people who want to stay at home.

But I think the proportions you describe are not high enough.