What is the impact of adding small portions of international equities into a portfolio?

Incorporating small portions of international equities into a portfolio can lead to a decrease in overall risk, which aligns with the correct answer. This occurs due to the benefits of diversification. When domestic and international investments are combined, the portfolio's exposure to various market dynamics, economic conditions, and geopolitical risks is reduced.

Global markets often do not move in perfect synchronization; by diversifying across different countries and economies, investors can lessen the impact of volatility from any single market. The international equities might react differently to economic events than domestic equities, thus when one market is facing a downturn, another might be thriving. As a result, the overall portfolio may experience less volatility and risk, leading to a more stable investment experience over time.

The other options suggest a significant increase in risk or return, which is less probable when adding only a small portion of international equities. A moderate decrease in risk is a more accurate representation of the typical outcome of such a strategy in financial planning.