What's It All About, Alfie
If you are tired of watching the Ping-Pong-Ball market, think like the smart money thinks: how to make money from the ashes. Now, it might be a little early, but here is one way I'm thinking we'll profit: yesterday's winner will turn...just as the worm does. The headline to pay attention to? "U.S. stocks have outpaced international developed markets, but the cycle may be shifting."
"U.S. equities have outperformed international developed markets stocks since the 2008-2009 global financial crisis, driven in part by the U.S.’s rapid resort to aggressive monetary easing that enabled an earlier economic recovery. As the U.S. economic cycle ages and the Federal Reserve gradually normalizes monetary policy, relative performance could be poised for a change."
It is time to put together our buy list for international and emerging stocks. Watch this space...you'll here more about this from me.
GROWTH CYCLE FAVORS INTERNATIONAL-"Developed markets outside the U.S. are earlier in the growth cycle, with longer runways." International developed countries are earlier in the economic cycle than the U.S. and benefit from still-supportive monetary policies. Europe and Japan should benefit as global growth drives a pickup in trade, although rising trade tensions pose a risk. Equity valuations outside the U.S. are relatively attractive and have room to improve.
As the chart below show...the worm always turns. Don't let the headlines distract you!