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Critics of international diversification observe that it does not protect investors against short-term market crashes because markets become more correlated during downturns. Although true, this observation misses the big picture. Over longer horizons, underlying economic growth matters more than short-lived panics with respect to returns, and international diversification does an excellent job of protecting investors.

About the Author(s)

Clifford Asness
Clifford S. Asness

Clifford S. Asness is managing and founding principal at AQR Capital Management LLC. Previously, he was managing director and a director of quantitative research for the asset management division at Goldman Sachs. Dr. Asness serves on the editorial boards of the Journal of Portfolio Management and the Financial Analysts Journal and the governing board of the Courant Institute of Mathematical Finance at New York University. He has received the James R. Vertin Award from the Research Foundation of CFA Institute for producing a body of research notable for its relevance and enduring value to investment professionals in addition to other awards given for his written articles. Dr. Asness holds a BS from the Wharton School at the University of Pennsylvania, a BS from the Moore School of Electrical Engineering, and an MBA and a PhD from the University of Chicago.

Roni Israelov
John M. Liew