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This is a serious question: if the US is the strongest national on earth militarily and economically, and Europe is threatened by US pullback in Ukraine (and, likely NATO and etc), how is it that Europ and International stocks are out-performing (at least YTD)?
Europe has been in/near-recession. Stocks are anticipating better times ahead. The best time to buy stocks (anywhere) is during the recession when the worst seems over.
The US is already at a super-perfection high level. Make allocation adjustments if you are afraid of heights (or depths).
As others have mentioned, Europe has underperformed for a very long time. European (and international) stocks are cheap and have low expectations. European/international stocks may outperform the U.S. if the low expectations are surpassed.
First thing to look at, as the title of the post says, is relative currency values. When the USD declines, like it did in the aughts before the GFC hit, foreign investments do very well.
Agree. In recent weeks, the dollar has been falling against several major currencies according to the dollar index. There are other implications suggesting negative outlooks.
In 2009, I paid $1.51 for a euro. Lately, it was $1.04. Right now, it's $1.08. The instability, confusion and lack of direction politically right now has a lot to do with the dollar's recent fall. Back in '09, we were in the midst of the GFC.
Comments
The US is already at a super-perfection high level. Make allocation adjustments if you are afraid of heights (or depths).
European (and international) stocks are cheap and have low expectations.
European/international stocks may outperform the U.S. if the low expectations are surpassed.
The instability, confusion and lack of direction politically right now has a lot to do with the dollar's recent fall. Back in '09, we were in the midst of the GFC.