Whenever I review a prospective client’s investment portfolio, I rarely see one that is truly globally diversified. The biggest problem I see is that most people are woefully over-weighted in US stocks. To make matters even worse, its usually exposure to just large US company stocks.
Their advisors might have placed them into General Motors, GE, Verizon, Proctor & Gamble, Johnson & Johnson, and similar large stocks.
The problem here is that the investor thinks he or she is properly diversified, but in reality, they have several sectors representing only two asset classes. So when one of the stocks rises, generally they all rise. But when one drops in price, more often then not they all drop. The result: unintentional wild swings in account values.