Summary
American stocks are performing worse than international stocks for the first time in many years. Investors are looking at global markets outside the U.S. due to high valuations of U.S. stocks and uncertainty with economic policies and AI investments. International stocks, especially from emerging markets, are attracting interest.
Key Facts
- U.S. stocks are less popular globally because they are priced high compared to international stocks.
- The S&P 500 index rose by about 17% this year, trading at nearly 23 times forward earnings, while the historical average is 18 times.
- In the same period, an index tracking international stocks (excluding U.S. stocks) increased by 29%.
- Emerging markets grew nearly 30%, with a weaker dollar aiding the growth.
- Before 2025, U.S. stocks generally outperformed international stocks.
- Concerns include high valuation of U.S. equities and the lasting effects of trade tariffs under President Trump.
- Investors are interested in Asian markets, especially China, which shows strong growth and competitive technology.
- Experts continue to hold positive views on international stocks for upcoming years, despite the ongoing AI market rally in the U.S.
