How Much Longer Can US Stocks Keep Beating The World?

How Much Longer Can US Stocks Keep Beating The World?
Andrew Rummer

over 2 years ago1 min

Mentioned in story

US stocks have been beating the rest of the world for nearly 14 years, a period of outperformance that’s both longer in duration and larger in magnitude than the run-up to the dot-com crash. 

According to a report from investment bank JPMorgan, US stocks have returned 237% more to investors over the past 13.6 years than those in 21 non-American developed economies around the world (tracked MSCI’s EAFE index).  

The US market has beaten all-comers since the financial crisis of 2008, powered higher by tech giants like Apple, Google, and Amazon

MSCI’s US index currently trades for 23.3x estimated profits, compared to a valuation of 16.7x for the EAFE index, making the US 40% more expensive than other developed markets. When the last great bull market began in March 2009, the two index’s valuations were almost identical. 

If you think the days of US dominance will soon end, check out exchange-traded funds (ETFs)  like the iShares MSCI EAFE ETF (ticker: EFA) that give you broad exposure to developed market stocks, while excluding those in the US.



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