Why International Stocks Are Leaving U.S. Stocks Behind

“The reason our stock market is so successful is because of me,” said President Trump.

He was speaking to reporters on Air Force One while on his way to Japan this month.

The America First slogan has plenty of support. And U.S. stocks have continued to rally since Trump’s inauguration.

This year, the S&P 500 gained about 17 percent to November 9, 2017. That’s on top of the market’s 286 percent gain between March 2009 and January 1, 2017.

But smart investors also need to look beyond their borders.

Tailwinds have pushed almost every global market since the beginning of the year. Ironically, the United States has one of the smallest sails.

Image by Pixabay

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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6 Responses

  1. worlds best value financial advisor

  2. Ben says:

    Hi Andrew,

    I am a Canadian living in Canada with a TFSA and RRSP. I have $65,000 to invest in lump sum or dollar cost averaging. As a Canadian my plan is to invest in VCE (Canadian total market) and XEF (International excluding North America)

    I am leery about investing in the US stock market at this time, given that the stock is reaching record highs right now.

    1. Should I include a US portfolio anyways, such as XUU or VUN?
    2. Or, do you recommend I invest in VCE and XEF only?
    3. Should I try to invest in an international index that includes US markets? I believe VXE is one option.

    I don’t need to worry about Bonds right now – that part is covered.

    I appreciate your time. I gave your book to my brother and my friend as Christmas presents.

  3. vaz says:

    Hi Andrew,I’m a 32 year old British science teacher based in China. Loved your second book and have lent it out to many people. I have recently opened an account with Interactive Brokers and I am just about to buy some funds. Does this allocation sound ok? All ETFs are Ireland domiciled and in USD (global nomad with plans to retire in Asia)… Is it too aggressive?

    30% in iShares Core S&P 500 UCITS ETF USD (Acc) (USD) CSPX (0.07% TER)
    30% in Vanguard FTSE Developed World UCITS ETF VDEV (0.18% TER)
    10% in iShares Core MSCI EM IMI UCITS ETF USD (Acc) EIMI (0.25% TER)
    20% in Vanguard FTSE Developed Europe UCITS ETF (USD) VEUD (0.12% TER)

    10% in US/Global bonds (I haven’t chosen the bond yet and I plan to increase this allocation with time)

    • Hi Vaz,

      I’m glad you found the book useful. This portfolio is very aggressive. But if you can tolerate some high annual losses (in the expectation of high long-term gains) it might be fine. But your personality would have to be able to handle volatility.


      • vaz says:

        Hi Andrew, thanks for your personal reply!

        Maybe I should modify this portfolio, to lower my emerging market exposure to 5% and increase my bond exposure to 15%. However with most stable government bonds not performing well, I’m not sure which to invest in. The safe bet says US Aggregate bonds right?

        I plan on investing my monthly income into the lagging fund or the most out-of-balance fund each month.

        • Hi Zaz,

          I think you are speculating. Do you have a copy of any of my books? If so, there are model portfolios there. Nothing is ever “performing”. All you have is the past. Yesterday is the past. Tuesday’s interest rates were the past. The future is unknowable.


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