You decided to read this piece, at least as far as the introduction—congratulations on being a true contrarian. A great many are going to sweep right past it for reasons that are obvious enough: for as many years as anyone can remember, there has been no particular advantage to owning stocks other than those that trade on American markets. In the past ten years, the S&P 500 has risen 75%. The Stoxx Europe 600 is up only 9%—quite a contrast. Check a few other parts of the world and you generally see the same or worse. Japan’s Nikkei 225 is up a mere 47%. The Shanghai Composite index is down by 43%. The iShares MSCI Brazil ETF is down 50%, and to end the list, the iShares MSCI Emerging Markets ETF is down 9%.
It may be surprising to some that the US has been outperforming the rest of the world, especially after being told by President Trump that we have been underperforming the world. As to what’s really going on, it isn’t clear from stock market returns alone whether the US is beating the world, or whether what wealth has reached the US has simply wound up disproportionately in the treasuries of publicly traded companies. The answer is certainly a bit of both, but evidence for the second is stronger: there’s no doubt that corporate profits have risen sharply over the past ten years as a percentage of GNP, while wages as a percentage of GNP have fallen over the same time. Don’t imagine that a few months of rising wages have fixed the problem; the consumer has been steadily weakened for more than a decade now, and a reckoning for that must necessarily come, in one form or another.
So let me throw this out there: the biggest trends often see the biggest reversals. Probably the biggest factor in play over the next decade will be increasing scarcity of resources. This, in turn, will allow countries that produce raw materials some real bargaining power, and prices will rise. Here are a few international ETFs you may want to grab before that happens.