This paper applies the mean-variance portfolio optimization (PO) approach and the stochastic dominance (SD) test to examine preferences for international diversification versus domestic diversification from American investors’ viewpoints. Our PO results imply that the domestic diversification...

The aim of this paper is to consider instability and ambiguity problems on portfolio selection. We examine the impact of estimation errors on financial portfolios optimization processes. We investigate the controversy problem of international and domestic optimal diversification strategies...