Now in a new book Malkiel moves on to extol the virtues of global portfolio diversification--in index funds and actively managed funds -- at a time when many investors are licking their wounds from Southeast Asia, Russia and, not so long ago, Latin America.
Just two index funds like the Vanguard Total Stock Market and Total International Stock Index provide effective, economical, tax efficient global equity diversification.
Particularly at this point in the cycle, replicating the index closes off entire sets of opportunities to investors, inhibits diversification and may magnify risks.