An investment portfolio reveals the risk preference of its owner. The graph above summarizes the foreign portfolio distribution of six large developed economies. The top half shows each country’s holdings of foreign assets, while the bottom half shows assets held by foreigners. The U.S. is the dominant financial risk taker, holding more than twice the proportion of equity held by the other major economies. America’s equity-heavy portfolio led to a significant deterioration in its net international investment position when world equity markets collapsed in 2008, and a significant recovery in 2009. The relatively high volatility in U.S. external wealth can be expected to continue in the coming years.