That was some ride we enjoyed yesterday. It was nice seeing stocks pop like that again - everything from top to bottom was nice and green on my portfolio listing.

Yesterday was the biggest up day in 5 years, so they say. The odd thing for me was that while yesterday was certainly a big day, it didn't feel like I'd had the best day in 5 years. A quick check proved my suspicions. While yesterday had been a good day for me, it wasn't the best. Not in the last 5 years anyway. I had had better days.

The reason for this? Diversification. I'm invested not only across all sectors of the domestic markets, but also heavily into markets outside the US. Diversification works two ways. Just as it shields a portfolio against downturns in any single asset class, it blunts the effects of a spike in prices for a particular class of investments.

I'm not crying in my beer this morning though. Not by any means. That's because my portfolio hasn't been down by nearly as much as markets in the US have been recently.

Now I know it's hard to convince anyone that diversification is a good idea the morning after a day when a pure play on US stocks worked so well. But consider this: in the past decade seven of the ten best performing stocks have been companies based outside the US.

And that's why yesterday, while really good, wasn't the hottest day I've had in the past 5 years. The fact that international markets have outperformed the domestic scene by nearly double in the most recent 5 years makes yesterday seem like just sort of a make up day.