Risky countries outperform safe ones in global equity markets by 0.50%.
The article explores how different risks in countries affect their stock market returns. By looking at factors like credit, currency, banking, economy, and politics, the researchers found that riskier countries tend to have higher returns compared to safer ones. However, this strategy is challenging to apply in real-world investing. Interestingly, after the global financial crisis, the profitability of this approach decreased.