Quote:
Originally Posted by Slava
The S&P 500 love is a recent phenomenon. It wasn't long ago that investors didn't want the S&P. The massive push for people to look there today is primarily based on recency bias, where past returns are viewed as if those times are destined to continue. That's a dangerous mindset in investing, though, and it can have disastrous consequences.
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I definitely think more (or at least some) ex-US exposure is warranted these days, as things currently are very overweight US wise. US companies make up something like 60% of global market cap, and the Mag 7 stocks alone makes up around 22%! Unless we think that will grow even more, chances are the ratio will mean-revert.
Never mind that you rarely hear about how the rest of the world has been kicking as lately. Despite another pretty good year, the US is actually having it's worse year versus the rest of the world since 2009. And as those above numbers show, historically things are still very skewed. I'm not saying people should dump the US, but I do think more people should be exposed more outside of it...even if something simple like VEU.