Create a chill guy discussion response for Advisors determining domestic versus international allocations should first examine return correlations: adding low-correlation foreign assets can shift the efficient frontier outward (Markowitz, 1952). Next, assess the client's tolerance for currency volatility, unhedged positions introduce Foreign Exchange risk that may either damp or boost returns depending on currency moves (Jorion, 1991). Then, gauge political and sovereign credit risk via country ratings or CDS spreads, capping exposures where event risk is elevated. Finally, factor in market liquidity and transaction costs, especially in less-developed bond markets where bid-ask spreads can erode yield