Are you tired of watching your portfolio lag behind while others seem to be striking gold in international markets? It’s time to rethink your strategy and look beyond the S&P 500. While the S&P 500 has delivered a solid 15% return this year, with whispers of reaching 7,000 on the horizon, the real action has been happening elsewhere—in international markets that have soared over 50%. But here’s where it gets controversial: Is now the right time to jump on the international bandwagon, or are you too late to the party? Let’s dive in.
Diversification isn’t just a buzzword—it’s a lifeline. If your portfolio is exclusively U.S.-focused, you might be missing out on opportunities that could outpace domestic indices over the next decade. Sure, chasing hot ETFs isn’t always a winning strategy, but for long-term investors, adding international exposure could be a game-changer. The question is: Can international stocks keep delivering 10%+ gains as U.S. valuations climb higher? And this is the part most people miss: Even as international markets close the valuation gap with the U.S., there’s still value to be found—if you know where to look.
ETFs are your ticket to global markets. Not everyone has access to individual international stocks, but ETFs offer a cost-effective way to diversify. Take the Vanguard FTSE Developed Markets ETF (VEA), for example. With over 3,800 stocks and a rock-bottom expense ratio of 0.03%, it’s a powerhouse for international exposure. Yes, it’s heavily weighted toward Europe (over 50%), but that aligns with Vanguard’s advice to focus on developed markets for the next 5–10 years. And here’s the kicker: While no ETF is immune to market downturns, VEA’s broad diversification makes it a resilient choice if the U.S. market takes a nosedive—especially if that AI bubble finally bursts. With a trailing P/E of 17.1 and a 2.73% yield, it’s both cheaper and more rewarding than the S&P 500, which it’s outpaced by nearly double this year (31% vs. 15.7%).
But what if you’re craving even more value? Enter the iShares MSCI EAFE Value ETF (EFV). This ETF tilts heavily toward value stocks in developed markets across Europe, Australia, Asia, and the Far East (EAFE). With a Morningstar gold medalist rating, a competitive 0.31% expense ratio, and a jaw-dropping trailing P/E of just 14.5, it’s a deep-value investor’s dream. Its yield? A juicy 3.3%. Year-to-date, it’s crushed the S&P 500 with nearly 35% gains. If you believe value and ex-U.S. stocks are the future, this ETF is a no-brainer.
Here’s the million-dollar question: Are you ready to bet on international markets outperforming the U.S. in the long run? While pundits like Vanguard are bullish on non-U.S. developed markets, there’s no guarantee. But one thing’s certain: Sitting on the sidelines might cost you more than taking a calculated risk. So, what’s your move? Are you adding these ETFs to your watchlist, or do you think the U.S. market still has more to give? Let’s debate it in the comments!
