Diversification of Portfolios in the Global Financial Market
...Global Financial Market
In 1995, the total cross-border capital flow reached $9 trillion, which is about one fifth of the world’s GDP that year (Caruana, 2007). The following year, many countries continued to invest globally, especially on emerging markets. A total capital of approximately $93 billion flowed into Indonesia, Korea, Malaysia, Philippines, and Thailand from all over the world (Park, 2002, pp.141-164). Evidently, investors have become more attracted to taking their risks internationally where the returns are considerably higher. However, their risks did not pay off that year. Instead of getting high returns for their investments... , they only saw huge losses,...