Allan, You are probably right that the ROW will also going into recession if the US has a downturn. I do think there is probably smaller correlation than the past. I’m still holding off foreign equities thinking that there still is a good chance they will drop too. Shanghai exchange also has very, very high PE ratios.
Major foreign markets also experienced downturn during the last big US bear market in 2002 timeframe. I might try plotting historical FTSE, CAC, Asia exchanges vs DOW/S&P500 in 2001-2003. So much for diversification with broad foreign equity index funds. There are some good global funds that focus on more recession-proof companies, I’m digging around now for some.
