What’s Next for International Stocks?
- After outperforming in 2017, international equities have lagged domestic equities significantly in 2018. Many investors are now wondering if they should continue to hang on to international stocks in their diversified portfolios. The short answer is still yes.
- Domestic and international stocks have historically moved in a cycle of alternating performance that lasts an average of 7.3 years, according to a study by Hartford Funds. We are now 7.6 years into the current run of U.S. outperformance – suggesting we are due for a turn in the cycle.
- With the recent market sell-off, international equities are trading at a deep discount relative to their peers in the U.S., resulting in a nearly 25% discount – the cheapest relative valuation in over 20 years, according to J.P. Morgan.