International stocks will outperform US stocks in 2021

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Da5id
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
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peskypesky
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Re: International stocks will outperform US stocks in 2021

Post by peskypesky »

Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
Da5id
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

peskypesky wrote: Fri Aug 20, 2021 9:17 pm
Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
Of course. You do know the "permanently high plateau" Irving Fisher reference?
stocknoob4111
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Re: International stocks will outperform US stocks in 2021

Post by stocknoob4111 »

anyone know how cheap International is? i.e. historical median PE vs current PE?
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Re: International stocks will outperform US stocks in 2021

Post by nigel_ht »

stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
I can’t find the charts but I believe the answer is not very cheap. Cheaper than the US but not low when you use PE calculations that include companies with negative earnings…
DB2
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

bogledogle87 wrote: Fri Aug 20, 2021 6:35 pm
DB2 wrote: Fri Aug 20, 2021 12:02 pm I'm surprised the gap between U.S. and Ex-US. is this large so far in 2021. Fed tapering may only fuel that gap further.
I am also surprised but I think COVID, the Fed, and the global supply chain issues are distorting just about everything at the moment. Nothing at all is rational. This post may have simply been a year or so too soon.

I’m still bullish on ex-us for the 2020’s decade overall. Not that it matters if I’m right or not because I don’t bet on anything except the total world index. 8-)
I think the U.S. is most likely to continue to be on the forefront of vaccines, boosters, eventually at-home prescription treatments, and maybe brand new vaccines if needed to deal with new, more radical Covid variants. The market is surely pricing this in. I think a lot (or most) countries are going to really struggle with Covid in a worse way for years to come in my view. The U.S. is at a huge advantage here.

What's happening in China is also having some kind of rippling effect as well on ex-U.S.
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Re: International stocks will outperform US stocks in 2021

Post by Candor »

peskypesky wrote: Fri Aug 20, 2021 9:17 pm
Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
I see a lot of this with the most vocal ex-US proponents. I'm beginning to think it might be a coping mechanism.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
Dregob
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Re: International stocks will outperform US stocks in 2021

Post by Dregob »

InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Believing and knowing are two different things.
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illumination
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Re: International stocks will outperform US stocks in 2021

Post by illumination »

DB2 wrote: Sat Aug 21, 2021 10:14 am

What's happening in China is also having some kind of rippling effect as well on ex-U.S. Communism well alive and thumping in China, so this is being repriced.

I never felt comfortable with the idea of stock investing (the ultimate expression of capitalism) in a Communist country. It's just too much of a contradiction (imo) and add to that the authoritarian nature of their government. Seeing what's happened over there in the last few months reaffirmed all that for me. Dumped my VXUS holdings several years ago and I also had some Chinese stock, glad I did. I'm okay missing out on a China boom if things change.

Less than 5% of my portfolio is "international only" now, I primarily use VEA (developed markets) that don't include China. I personally think international continues to underperform for a while, with or without China. Glad I dumped most of my international a while ago, I've largely embraced Bogle's view that the US market has "good enough" international exposure.
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

Candor wrote: Sat Aug 21, 2021 10:21 am
peskypesky wrote: Fri Aug 20, 2021 9:17 pm
Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
I see a lot of this with the most vocal ex-US proponents. I'm beginning to think it might be a coping mechanism.
Nice psychoanalysis. But nah, I don't need a coping mechanism. I was OK when I was 100% US for most of my investing career, OK now that I've been 40% ex-US for the last 5-6 years too. I don't turn out to lose sleep out of FOMO, in fact I'm quite good at tuning out the noise. I'm not fond of excessive confidence about the nature of future investment returns from any poster, and tend to poke fun at that tho as I was in the post above. I'm not into making predictions, like those that started this thread, or that US or int'l will outperform over some future specified time period.
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

illumination wrote: Sat Aug 21, 2021 10:26 am
DB2 wrote: Sat Aug 21, 2021 10:14 am

What's happening in China is also having some kind of rippling effect as well on ex-U.S. Communism well alive and thumping in China, so this is being repriced.

I never felt comfortable with the idea of stock investing (the ultimate expression of capitalism) in a Communist country. It's just too much of a contradiction (imo) and add to that the authoritarian nature of their government. Seeing what's happened over there in the last few months reaffirmed all that for me. Dumped my VXUS holdings several years ago and I also had some Chinese stock, glad I did. I'm okay missing out on a China boom if things change.

Less than 5% of my portfolio is "international only" now, I primarily use VEA (developed markets) that don't include China. I personally think international continues to underperform for a while, with or without China. Glad I dumped most of my international a while ago, I've largely embraced Bogle's view that the US market has "good enough" international exposure.
I completely understand. I am seriously re-evaluating international investing myself.
Triple digit golfer
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

I don't mind that international is lagging so bad any more than I mind that financials are lagging technology. I own "stocks" and I don't think of them by country, sector, etc. They're just stocks.
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Re: International stocks will outperform US stocks in 2021

Post by Nathan Drake »

nigel_ht wrote: Sat Aug 21, 2021 10:09 am
stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
I can’t find the charts but I believe the answer is not very cheap. Cheaper than the US but not low when you use PE calculations that include companies with negative earnings…
It’s some of the cheapest discount on record.

If you don’t remove negative earnings you wouldn’t have invested at the best time to buy in the great financial crisis of 2008

Image
Last edited by Nathan Drake on Sat Aug 21, 2021 11:40 am, edited 1 time in total.
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DB2
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

Nathan Drake wrote: Sat Aug 21, 2021 11:21 am
nigel_ht wrote: Sat Aug 21, 2021 10:09 am
stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
I can’t find the charts but I believe the answer is not very cheap. Cheaper than the US but not low when you use PE calculations that include companies with negative earnings…
It’s some of the cheapest discount on record.

If you don’t remove negative earnings you wouldn’t have invested at the best time to buy in the great financial crisis of 2008
But they are cheapest for a good reason, right? Most of the top companies in the world reside in the U.S. I don't see that changing real soon.

I'm not anti-international investing by the way. And I absolutely see the logic of global market cap, but at the same time, I see some indisputable realities not changing anytime soon. I also think Covid has changed the playing field for a long time where the U.S. has a big advantage as this virus continues to mutate and rampage throughout the world for a long time, sadly. We might only be a few mutations away from needing a brand new vaccine. And the U.S. will be once again far ahead here.
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

Historically, the best investments usually feel the worst to invest in. Nobody wanted U.S. stocks in 1982.

I'll stick with owning them all.
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Re: International stocks will outperform US stocks in 2021

Post by Nathan Drake »

DB2 wrote: Sat Aug 21, 2021 11:38 am
Nathan Drake wrote: Sat Aug 21, 2021 11:21 am
nigel_ht wrote: Sat Aug 21, 2021 10:09 am
stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
I can’t find the charts but I believe the answer is not very cheap. Cheaper than the US but not low when you use PE calculations that include companies with negative earnings…
It’s some of the cheapest discount on record.

If you don’t remove negative earnings you wouldn’t have invested at the best time to buy in the great financial crisis of 2008
But they are cheapest for a good reason, right? Most of the top companies in the world reside in the U.S.

I'm not anti-international investing by the way. And I absolutely see the logic of global market cap, but at the same time, I see some indisputable realities not changing anytime soon. I also think Covid has changed the playing field for a long time where the U.S. has a big advantage and this virus continues to mutate and rampage throughout the world for a long time, sadly.
The best times to invest are when investing is painful and has uncomfortable stigmas/narratives surrounding it. Was US cheap for a good reason in the early 80s? It was certainly cheap due to prevailing narratives of the day as the P/Es went on to be some record all time lows of around 8. We now have 4x the multiple of PEs than during the best time to invest.

Things are comfortable/cozy in the US. You don't get compensated for cozy narratives. Being a "top" company isn't exclusive to the US. There are plenty of "top companies" in exUS. The US simply features high concentration in certain types of companies that have performed well this decade. Those that perform well one decade regularly trail the market the next decade.
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DB2
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

Nathan Drake wrote: Sat Aug 21, 2021 11:47 am
DB2 wrote: Sat Aug 21, 2021 11:38 am
Nathan Drake wrote: Sat Aug 21, 2021 11:21 am
nigel_ht wrote: Sat Aug 21, 2021 10:09 am
stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
I can’t find the charts but I believe the answer is not very cheap. Cheaper than the US but not low when you use PE calculations that include companies with negative earnings…
It’s some of the cheapest discount on record.

If you don’t remove negative earnings you wouldn’t have invested at the best time to buy in the great financial crisis of 2008
But they are cheapest for a good reason, right? Most of the top companies in the world reside in the U.S.

I'm not anti-international investing by the way. And I absolutely see the logic of global market cap, but at the same time, I see some indisputable realities not changing anytime soon. I also think Covid has changed the playing field for a long time where the U.S. has a big advantage and this virus continues to mutate and rampage throughout the world for a long time, sadly.
The best times to invest are when investing is painful and has uncomfortable stigmas/narratives surrounding it. Was US cheap for a good reason in the early 80s? It was certainly cheap due to prevailing narratives of the day as the P/Es went on to be some record all time lows of around 8. We now have 4x the multiple of PEs than during the best time to invest.

Things are comfortable/cozy in the US. You don't get compensated for cozy narratives. Being a "top" company isn't exclusive to the US. There are plenty of "top companies" in exUS. The US simply features high concentration in certain types of companies that have performed well this decade. Those that perform well one decade regularly trail the market the next decade.
Is there chart since 2009 which shows S&P500 without FAANG vs International? I would be curious to see.
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Re: International stocks will outperform US stocks in 2021

Post by Actin »

This thread is a great reminder of why market timing will always lose. International investing is market timing.
Triple digit golfer
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

Actin wrote: Sat Aug 21, 2021 12:08 pm This thread is a great reminder of why market timing will always lose. International investing is market timing.
False and false.
Da5id
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

Actin wrote: Sat Aug 21, 2021 12:08 pm This thread is a great reminder of why market timing will always lose. International investing is market timing.
Can you give your definition of market timing? And why all international investing fits that? Doesn't seem to agree with any definition I'm aware of.

This thread might fit some peoples ideas of market timing if acted on. It is a specific prediction for a specific period (a year), and if that prediction is taken as actionable I guess people could use it for market timing. That wouldn't be (have been) wise IMO.
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Re: International stocks will outperform US stocks in 2021

Post by Kaktus »

UpsetRaptor wrote: Fri Jul 02, 2021 9:43 am
bogledogle87 wrote: Fri Jul 02, 2021 9:22 am
sureshoe wrote: Fri Jul 02, 2021 8:14 am I'm correct in saying that the US has been outperforming International for a very long time... if not forever, right? So it's not just these stocks either.

It feels there is some material advantage that should be apparent, but apparently is not.
I with you 100% on both points.

In order to justify a prediction of continued & prolonged future outperformance, one would need to be able to articulate specific factors that are present, or will be present, that are not priced into the market today. They would need to know exactly why they are not yet priced in. They would be remiss to only reference backward-looking observations to explain previous performance to extrapolate forward. They would logically have to present some information that is either not yet known or believed by the average aggregate global investor, currently. This information should likely not be observations that everyone already agrees with, because if they were, they would be part of today's price. This the paradox.
I've posited this question in other threads, and I've yet to see a satisfying answer, though I'm open to one. Suppose a country called Entrepreneurland has an inherent entrepreneurial advantage over the weighted average of the rest of the global market. Whatever the right theoretical level of all the variables for successful startups to establish and become highly profitable - social, political, availability of capital, access to talent, etc - suppose that Enterpreneurland has them all in better proportions than the rest of the global market. Such that future highly profitable startups/corporations, which don't exist yet and so aren't investable yet, are more likely to be established in Entrepreneurland. Would one not expect Entrepreneurland to outperform the global market index in the future, based on those future highly profitable companies that don't exist yet and so aren't investible yet in the current index?
I share this view that the difference has been that the US has attracted so many talented and ambitious people. Together with good social institutions. These people then work with each other. I have seen the figure that about 16 pecent of the startups in Silicon Valley had a guy from India as the founder (while making up 1 percent of total population).
AlwaysLearningMore
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Re: International stocks will outperform US stocks in 2021

Post by AlwaysLearningMore »

peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Your graphic is outdated, it ends in 2016. It's now 201 :wink:
Last edited by AlwaysLearningMore on Sun Aug 22, 2021 9:04 am, edited 1 time in total.
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Re: International stocks will outperform US stocks in 2021

Post by JoMoney »

Sad to say, but over the past decade, even better than U.S. stocks, shorting ex-US to hold a leveraged position in US stocks/Bonds resulted in higher returns, higher "risk adjusted returns" (Sharpe ratio), with lower max drawdown . :shock:
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AlwaysLearningMore
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Re: International stocks will outperform US stocks in 2021

Post by AlwaysLearningMore »

Candor wrote: Sat Aug 21, 2021 10:21 am
peskypesky wrote: Fri Aug 20, 2021 9:17 pm
Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
I see a lot of this with the most vocal ex-US proponents. I'm beginning to think it might be a coping mechanism.
The oft-quoted graphic above is outdated, it ends in 2016. It's now late August 201 :wink:

The many years of international's underperformance has provided plenty of time to cogitate and employ various coping strategies. After well over two decades of underperformance, rationalization ("It'll go up....eventually") and suppression ("I've owned this underperforming dog since my daughter was born. Now she's in graduate school!") are two common refrains seen on BH.

I could find M* Vanguard Total International Stock Index Fund (VTIAX) data back to April 1996. Here are performance comparisons from April 1996 - April 2006; from April 2006 - April 2016; and the performances from April 2016 - present.

Two 10-year periods, and a 5-year period (so far). 25+ years
(To put things into perspective, in 1996: DVD's were launched in Japan; Microsoft released Windows NT 4.0; Internet Explorer 3 was released; Bill Clinton was US President; "mad cow" disease alarmed Britain.)

Image

Image

Image
Last edited by AlwaysLearningMore on Sun Aug 22, 2021 9:05 am, edited 1 time in total.
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Da5id
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

JoMoney wrote: Sun Aug 22, 2021 8:50 am Sad to say, but over the past decade, even better than U.S. stocks, shorting ex-US to hold a leveraged position in US stocks/Bonds resulted in higher returns, higher "risk adjusted returns" (Sharpe ratio), with lower max drawdown . :shock:
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And therefore going forward one can say with great confidence that ....?
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JoMoney
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Re: International stocks will outperform US stocks in 2021

Post by JoMoney »

If one looks at the total return of the MSCI EAFE 'Gross Return' index relative to the S&P 500, the S&P 500's higher return seems to be entirely a matter of the past decade. Going back from 1970 through 2010 would look like relative "mean reversion" with about the same returns over the period.
Unfortunately, looking at the MSCI EAFE 'Net Return' index (what an investor might have actually got net of foreign tax withholding) reveals a longer prevailing relative under-performance. Additional transactional expenses related to ex.US investments would have had further impact.
Morningstar Growth Chart EAFE GR v. NR v. S&P 500
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

JoMoney wrote: Sun Aug 22, 2021 9:14 am If one looks at the total return of the MSCI EAFE 'Gross Return' index relative to the S&P 500, the S&P 500's higher return seems to be entirely a matter of the past decade. Going back from 1970 through 2010 would look like relative "mean reversion" with about the same returns over the period.
Yeah, I think unprecedented Fed policies since 2009 have fueled this (Growth stock explosion)...in addition to FAANG+M have become such a cornerstone in one way or the other to people's lives across the world really.

I would still be curious to see how the S&P500 has performed minus FAANG+M vs ex-US since 2009.
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Re: International stocks will outperform US stocks in 2021

Post by siamond »

JoMoney wrote: Sun Aug 22, 2021 9:14 am If one looks at the total return of the MSCI EAFE 'Gross Return' index relative to the S&P 500, the S&P 500's higher return seems to be entirely a matter of the past decade. Going back from 1970 through 2010 would look like relative "mean reversion" with about the same returns over the period.
Unfortunately, looking at the MSCI EAFE 'Net Return' index (what an investor might have actually got net of foreign tax withholding) reveals a longer prevailing relative under-performance. Additional transactional expenses related to ex.US investments would have had further impact.
Using the latest Simba's backtesting spreadsheet, I assembled a Telltale chart which shows the cumulative trajectory (USA, Ex-USA/Developed) relative to World (Developed). As usual with Simba's annual data, this accounts for expense ratios, NR series are used for Ex-USA (which is a little unfair as GR series are used for World), but this doesn't account for possible additional expenses. Chart is based on annual returns, including 2020, but not 2021.

Image

Unsurprisingly, we see the same pattern as with the rolling returns chart, the over-performance of the US since 1970 is primarily due to the last decade where the US skyrocketed while the rest of the world had a harder time recovering from the financial crisis. Reading too much in the past decade seems quite dangerous to me.

Note that the way NR series are defined is a coarse/conservative one-size-fits-all, it does NOT match individual situations when it comes to [extra] taxation of funds including international investments. I took a deep dive once (my own AA is 50/50 between US and ex-US) and wasn't impressed. My actuals were definitely hovering in-between the GR numbers and the NR numbers. In other words, using the NR numbers is probably somewhat unfair (while using GR numbers is overly rosy for sure).
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
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Re: International stocks will outperform US stocks in 2021

Post by Leif »

We have not even gotten a good tease, like SV. Well, just keep holding on. Even a genius can make a mistake or two. Looks like the OP has left the room. Will he really return at the witching hour?
Last edited by Leif on Sun Aug 22, 2021 11:15 am, edited 1 time in total.
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

midareff wrote: Sun Aug 22, 2021 10:53 am
InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am
midareff wrote: Sun Aug 22, 2021 10:53 am
InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
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Re: International stocks will outperform US stocks in 2021

Post by TheNightsToCome »

stocknoob4111 wrote: Sat Aug 21, 2021 9:18 am anyone know how cheap International is? i.e. historical median PE vs current PE?
Look under "equities" - "charts" - "CAPE ratio"

https://interactive.researchaffiliates. ... e=Equities
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am
midareff wrote: Sun Aug 22, 2021 10:53 am
InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
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Re: International stocks will outperform US stocks in 2021

Post by DB2 »

A weaker dollar, which many predict within the decade, might be the biggest potential boon to ex-U.S. equities.

The dollars dropped a lot during the 2000s which might one of the primary reasons why ex-U.S. outperformed U.S. by almost 3% annually from 2000-2010. It also explains why gold and gold stocks did so well along with the fear of whether QE would work once out of the Global Financial Crisis. After it was apparent that it would work, gold sold off and U.S. stocks have done remarkably well. Ex-U.S. stocks unable to keep up.
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midareff
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am
midareff wrote: Sun Aug 22, 2021 10:53 am
InvestorNewb wrote: Mon Jan 04, 2021 7:56 pm Today is the first trading day of the year.

I have a prediction that the international stock market will outperform the US stock market in 2021.

This thread will be revisited on 12/31/2021 to show the genius that I am.

Keep in mind that I've been correct before and I will be correct again.
Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am
midareff wrote: Sun Aug 22, 2021 10:53 am

Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period.
It's sarcasm.
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midareff
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Triple digit golfer wrote: Mon Aug 23, 2021 8:23 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am

That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period.
It's sarcasm.
Thanks.
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Re: International stocks will outperform US stocks in 2021

Post by Nathan Drake »

midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am
midareff wrote: Sun Aug 22, 2021 10:53 am

Even a broken clock is right twice a day. As of 8/22/2021 VTSAX YTD gain of 17.93% vs VTIAX YTD gain of 6.84% per M*. That's an 11.09% variation. Doesn't look like this is the year. I'd suggest you sell more of your winner to buy more of the under-weight stake. Maybe next year.
That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
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midareff
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am

That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Thanks Nathan
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midareff
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Candor wrote: Sat Aug 21, 2021 10:21 am
peskypesky wrote: Fri Aug 20, 2021 9:17 pm
Da5id wrote: Fri Aug 20, 2021 9:09 pm
peskypesky wrote: Fri Aug 20, 2021 8:59 pm Image

will the cycling continue?
Inconceivable. The US has hit a permanently high plateau.
is that sarcasm? :)
I see a lot of this with the most vocal ex-US proponents. I'm beginning to think it might be a coping mechanism.
Or the inability to cope with thoughts, concepts and ideas that are not their own regardless of the factual evidence. Deny, deny and deny. I did not have a sexual affair with that woman... well, at least not as sexual affair has been explained to me.
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am
Triple digit golfer wrote: Sun Aug 22, 2021 11:14 am

That's very different from your previous recommendations, so you've either changed your opinion or you're being sarcastic and unproductive.
Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Define "mathematical inevitability" in this context. And over what time frame? Or do you use it as a synonym for "I think it quite likely", which is fair enough. I think it is quite possible, which is why I own some international. But if you think it is like "2+2=4", 100% certain come what may, that international will outperform US over a particular time frame, well, color me dubious.
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midareff
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Re: International stocks will outperform US stocks in 2021

Post by midareff »

Da5id wrote: Mon Aug 23, 2021 12:07 pm
Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am

Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Define "mathematical inevitability" in this context. And over what time frame? Or do you use it as a synonym for "I think it quite likely", which is fair enough. I think it is quite possible, which is why I own some international. But if you think it is like "2+2=4", 100% certain come what may, that international will outperform US over a particular time frame, well, color me dubious.
I'd like to see Mr. Drake's response to this as well.
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burritoLover
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Re: International stocks will outperform US stocks in 2021

Post by burritoLover »

Geez, don't you guys know about the new factor that Bogleheads found - UmI (U.S. minus International). This is a unique factor where U.S. stocks have less risk but a higher return than international. Keep in mind, sometimes UmI can go through periods of underperformance but this is virtually impossible now cause it hasn't for the last 10 years (another unique attribute for this factor). But, you can keep 20% international if you are worried about it.
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Re: International stocks will outperform US stocks in 2021

Post by Nathan Drake »

Da5id wrote: Mon Aug 23, 2021 12:07 pm
Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm
midareff wrote: Sun Aug 22, 2021 11:47 am

Your position on international is clear. Own as much of it as you choose. You do as you do and I'll take care of mine as I do.
As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Define "mathematical inevitability" in this context. And over what time frame? Or do you use it as a synonym for "I think it quite likely", which is fair enough. I think it is quite possible, which is why I own some international. But if you think it is like "2+2=4", 100% certain come what may, that international will outperform US over a particular time frame, well, color me dubious.
Technically today it already happened. Intl is doing better than US.

This is a start/end date of a few hours.

Tongue in cheek aside, if you honestly expect US to outperform into perpetuity it will literally consume the entire world global cap over time, and that is almost certainly not going to occur.

History shows us that these two assets go through periods of out performance and under performance. I expect that to continue for obvious reasons. I am not suggesting I know a time period.
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Da5id
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

Nathan Drake wrote: Mon Aug 23, 2021 12:48 pm
Da5id wrote: Mon Aug 23, 2021 12:07 pm
Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am
Triple digit golfer wrote: Sun Aug 22, 2021 12:12 pm

As I suspected, it was the latter.
Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Define "mathematical inevitability" in this context. And over what time frame? Or do you use it as a synonym for "I think it quite likely", which is fair enough. I think it is quite possible, which is why I own some international. But if you think it is like "2+2=4", 100% certain come what may, that international will outperform US over a particular time frame, well, color me dubious.
Technically today it already happened. Intl is doing better than US.

This is a start/end date of a few hours.

Tongue in cheek aside, if you honestly expect US to outperform into perpetuity it will literally consume the entire world global cap over time, and that is almost certainly not going to occur.

History shows us that these two assets go through periods of out performance and under performance. I expect that to continue for obvious reasons.
I don't expect it to go on forever. And I own international because I expect it will have its day, and because I like to diversify away some risk. But I dislike the phrase "mathematical inevitability" in this context. Perpetuity is not a meaningful time horizon for most investors. I believe that US could outperform Int'l over the next 20-30 years. Is it unlikely? Probably, based on history. But impossible because of "math"? I'd say no.
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Re: International stocks will outperform US stocks in 2021

Post by Nathan Drake »

Da5id wrote: Mon Aug 23, 2021 12:52 pm
Nathan Drake wrote: Mon Aug 23, 2021 12:48 pm
Da5id wrote: Mon Aug 23, 2021 12:07 pm
Nathan Drake wrote: Mon Aug 23, 2021 8:41 am
midareff wrote: Mon Aug 23, 2021 7:32 am

Is it sarcasm or merely a recapitulation of the situation world weight investors have achieved for the latest extended period. New money has been buying the lower performing asset class and achieving lower performance from it. All "one day or one year" prognostications aside, that is the current reality. You may choose to agree or disagree but the facts are the facts. Respond as you will but I've said all I need to on this subject.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows. That’s diversification
Define "mathematical inevitability" in this context. And over what time frame? Or do you use it as a synonym for "I think it quite likely", which is fair enough. I think it is quite possible, which is why I own some international. But if you think it is like "2+2=4", 100% certain come what may, that international will outperform US over a particular time frame, well, color me dubious.
Technically today it already happened. Intl is doing better than US.

This is a start/end date of a few hours.

Tongue in cheek aside, if you honestly expect US to outperform into perpetuity it will literally consume the entire world global cap over time, and that is almost certainly not going to occur.

History shows us that these two assets go through periods of out performance and under performance. I expect that to continue for obvious reasons.
I don't expect it to go on forever. And I own international because I expect it will have its day, and because I like to diversify away some risk. But I dislike the phrase "mathematical inevitability" in this context. Perpetuity is not a meaningful time horizon for most investors. I believe that US could outperform Int'l over the next 20-30 years. Is it unlikely? Probably, based on history. But impossible because of "math"? I'd say no.
That wasn’t really my point. You’re just arguing semantics. Sure, exUS could never have a single moment when it outperforms going forward. Well, that was already shattered today. Volatility of assets being what they are makes this pretty much a mathematical certainty, but feel free to disagree with that viewpoint.

The poster I was replying to made it seem as though there should be something illuminating about the fact that this decade new purchases of international have had less returns than US. The same will be true of US, just like it was in the prior decade. I can’t tell you when, but it’s sort of a meaningless discussion because it depends highly on your start/end dates.
Last edited by Nathan Drake on Mon Aug 23, 2021 1:02 pm, edited 1 time in total.
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gubernaculum
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Re: International stocks will outperform US stocks in 2021

Post by gubernaculum »

They will need to move more than 10 points to surpass US. GOOD LUCK WITH THAT.
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Re: International stocks will outperform US stocks in 2021

Post by Da5id »

Nathan Drake wrote: Mon Aug 23, 2021 1:00 pm
Da5id wrote: Mon Aug 23, 2021 12:52 pm
Nathan Drake wrote: Mon Aug 23, 2021 1:00 pm Technically today it already happened. Intl is doing better than US.

This is a start/end date of a few hours.

Tongue in cheek aside, if you honestly expect US to outperform into perpetuity it will literally consume the entire world global cap over time, and that is almost certainly not going to occur.

History shows us that these two assets go through periods of out performance and under performance. I expect that to continue for obvious reasons.
I don't expect it to go on forever. And I own international because I expect it will have its day, and because I like to diversify away some risk. But I dislike the phrase "mathematical inevitability" in this context. Perpetuity is not a meaningful time horizon for most investors. I believe that US could outperform Int'l over the next 20-30 years. Is it unlikely? Probably, based on history. But impossible because of "math"? I'd say no.
That wasn’t really my point. You’re just arguing semantics. Sure, exUS could never have a single moment when it outperforms going forward. Well, that was already shattered today. Volatility of assets being what they are makes this pretty much a mathematical certainty, but feel free to disagree with that viewpoint.

The poster I was replying to made it seem as though there should be something illuminating about the fact that this decade new purchases of international have had less returns than US. The same will be true of US, just like it was in the prior decade. I can’t tell you when, but it’s sort of a meaningless discussion because it depends highly on your start/end dates.
I was arguing with your language. Not I guess your point. But I believe you are being disingenuous about what your point was. If you read your original statement, you can perhaps see why I argued with it.
New money purchases of US TSM will be saying the same thing as exUS in the future. It’s a mathematical inevitability as the history of mean reversion shows.
So you are saying in that context you meant that Int'l outperforming US for a day would be a reason current US TSM purchasers will have regrets? I'm saying that in the investment lifetime of some current purchasers (say 20-30 years) it is not "mathematically inevitable" that they will regret it at all.

You also feel like you are slaying straw men, but I guess that is par for the course on both sides of this discussion. Do you actually think "Sure, exUS could never have a single moment when it outperforms going forward. " was a fair response to what I wrote, which mentioned a limited time frame?
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Re: International stocks will outperform US stocks in 2021

Post by Triple digit golfer »

gubernaculum wrote: Mon Aug 23, 2021 1:02 pm They will need to move more than 10 points to surpass US. GOOD LUCK WITH THAT.
Why would anybody care about one "surpassing" the other? I only care about performance going forward. If you told me that one would earn 10% a year and the other 5%, I'd gladly request that the U.S. be the 10% because my overall portfolio return would be higher.

Some of you guys act like people who diversify internationally want international to outperform and/or the U.S. to perform poorly. That's stinkin' thinkin' and far from the truth. I really don't care which one outperforms. I want my portfolio diversified and to earn a return that is high enough to reach my goals. So far, my portfolio has far exceeded that.
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