It's a small world after all.

If misery loves company, investors in stock mutual funds have something to be happy about after all.

Looking at the way markets have been performing lately, anyone might wonder whether it's worth the trouble to distinguish among domestic funds, which put most or all of their money in U.S. based stocks; international funds, which specialize in non U.S. stocks; and global funds; which mix the two together.

The average of all 9,000-plus stock funds tracked by Bloomberg lost 15.8 percent; international equity funds were down 15.9 percent, and global funds fell 15.6 percent. Correlations that close tend to make one's careful diversification efforts look silly. The question is are things going to stay that way over longer periods of time?

In fairness, even now some modest differences appear when we get more geographically specific. European funds, according to Bloomberg data, show an 18 percent three-month loss, while Asian-Pacific funds are down "only" 11.9 percent and funds specializing in emerging markets 13.6 percent.

If I'm going to put a whole lot of credence in around-the-world diversification, though, we want to see something more convincing than that. As it happens, a couple of big fund companies have been busy lately trying to keep us believing. "Unusual circumstances" -- specifically the rise an fall of high-technology stocks -- have led to close correlations of late, says T. Rowe Price Associates, which manages $160 billion in funds and other accounts from its home base in Baltimore.

Fidelity Investments in Boston has just published a15-page report arguing that the case for thinking international is as strong as ever.

Yes, the firm says, the benefits were hard to see over the past decade, when the U.S. stock market was booming. Even so, it says, "there have been many extended periods in which international stocks have outperformed U.S. stocks. There is substantial cyclicality and volatility in the three-year returns, confirming that investors will have difficulty timing these swings in performance."

All my doubts aren't dispelled, though. Is it just a coincidence that the U.S. market has dominated since about 1990, when the Cold War was ending and this country began to emerge as the world's lone superpower?

As "globalization" continues, won't correlations tend to keep getting closer as national economies become more and more interlinked? If globalization falters, won't all national economies tend to suffer together from the adverse effects?

Some day, what country a company hails from will have little relevance to investors. Partisans of international stocks as a separate asset class say that time is still at least 10 years away.