Of course they are! Are you kidding me? It’s not even close! (This is what I imagine you’re saying in your head right now.) Just take a look at the data below from two ETFs that proxy the U.S. and international stock markets: ITOT for the U.S. and ACWX for international.

As of the end of July 2017, international markets have added about 725 basis points of value over U.S. stocks.

Done. Shortest blog ever!

Not so fast. It’s important to look into what factors are contributing to the outperformance of international stocks:

  1. Lower starting valuations. Sure, those help.
  2. Improving earnings. Yes, that is a big one.
  3. GDP growth increasing and, more importantly, growing above expectations. Yes, and yes!
  4. Currency? Let’s look a little closer.

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