From the desk of Louis Sykes @haumicharts
For the longest time, investors in the United States have been rewarded for their home country bias and their overexposure to large-caps and growth stocks.
The secular trend of underperformance from international equities relative to the United States commenced over 15 years ago. Many investors have simply never seen stocks outside the US outperform over any material timeframe.
It’s not a matter of impossibility; rather, our recency bias tends to mistake unfamiliarity for the extraordinary.
A regime of sustained value outperformance isn’t isolated to the realm of fantasy. It was only last year that holding growth over value was nothing short of opportunity cost, while international equities outpaced their US counterparts through Q4 and into the new year.
Recently, Meb Faber joined us on the morning show, where he discussed the topic of international investing. He argued that this is the best time in history to make the value trade, both domestically and internationally.
While there is still plenty of work to be done before we want to favor international equities, it’s a scenario we’d be foolish not to prepare for.