The ‘Dumb’ Money Is Bailing on U.S. Stocks. That’s Smart.

Posted by jasonzweig on Oct 1, 2018 in Articles & Advice, Blog, Columns, Featured |

Image Credit: Alex Nabaum

By Jason Zweig | Sept. 28, 2018 11:00 a.m. ET

Does it make sense to invest anywhere but in the U.S?

While the S&P 500 is within 1% of its all-time high, European markets are flat, Chinese stocks are in a deep slump and the Japanese market—after a huge recent run-up—has finally clawed its way back to where it was 27 years ago.

Through Aug. 31, the S&P 500 has outperformed international stocks, as measured by the MSCI World ex USA Index, over the past one, three, five, 10, 15, 20, 25, 30, 35, 40 and 45 years, according to AJO, an institutional investment manager in Philadelphia. Had you put $10,000 in each in 1973 and reinvested all your dividends, your U.S. holdings would be worth $1.06 million; your international stocks, $356,000.

All those numbers seem to indicate you’d be crazy to diversify internationally. But, in fact, all they signify is that numbers can play tricks on you. It still makes sense to add international stocks to a U.S. portfolio, probably more so than ever….

To read the rest of the column:

https://www.wsj.com/articles/the-dumb-money-is-bailing-on-u-s-stocks-thats-smart-1538146842

For further reading:

Books:

Benjamin Graham, The Intelligent Investor