International Markets Vs. The USA

{F}rom December 31, 1979 to December 31, 2009, the S&P 500 annualized at 11.5% per year.  And so did the MSCI Europe.  It annualized at 11.5% per year too.  Think about that. This is the three-decade breakdown, and the cumulative returns across them. 

That’s right, for three decades, equity returns in Europe and the US were almost exactly the same.  Yet in this last decade, which will be finished in less than two months, the picture has been very different. 

The above information and tables are taken from a blog post titled "America's Decade" from a firm named Albert Bridge Capital.  In that post they point out that for whatever reason the past decade has belonged to us Americans in terms of equity performance.  It's not just in Europe either.  You can look all over the globe and see that the US has outperformed I believe nearly every other region of the world by many percentage points.  I have said for a very long time that other parts of the world are much cheaper than the US on a valuation basis.  Unfortunately, you can go back on this blog and see that I've been saying that for years!  Maybe it will start to matter in the next decade or maybe not.  I still believe that given the growth rates, especially in Asia, investors need some international exposure.  In the meantime you are for the most part paid to wait if you use international related ETFs because many parts of the globe have better yields than the USA.

Back Thursday.  {The above is not an investment recommendation or investment advice but rather an observation about relative valuation.}

Long international ETFs in client and personal accounts.   I reserve the right to change these investments without verbal, written or electronic communication at any time.