Chasing Performance

Last night, I learned that a friend of mine shifted all his money out of US markets and into international stocks -- because of fear of US stock market turmoil.

I couldn't think of a worse move. First, it's a little bit of chasing performance -- which never works. For years, international markets were the worst place to put your money. Lately, they've been on fire. And, with every advisor now saying to up your % of foreign stocks, you know the writing is on the wall. Also, it's not like every country out there is going to do better if America is dragged down.

Second, as the markets proved today, it's naive to think that the stock markets aren't interrelated in today's age of GLOBAL trading, sovereign funds, etc.