Will the rest of the world, with much better valuation, ever catch the US?
Being globally diverse with my core portfolios has hurt performance relative to just owning US large cap. Of course, these go in streaks where owning REITS really helped performance when they crushed the S&P 500 for maybe 20 years.
From Stocktwits email
STOCKS
A Fresh Breakout For Tech Stocks
The S&P 500 hit its 56th record high this year, with the U.S. stock market ballooning to 63% of global market cap. That’s up from 60.5% this year, and the next biggest market is Japan…at 5.6%. Needless to say, U.S. stocks are the global leader in risk assets right now.
Part of the driving force behind that is the U.S. tech sector, which is the largest weighting in the major indexes and the best performer by far since the great financial crisis. And low and behold, the sector is breaking out again to all-time highs.
Below is a roughly one-year chart showing the sector ETF $XLK’s clean breakout above its July highs, as strength in stocks like Apple continues to lead.
Source: TradingView.com
In addition to owning the leaders, traders and investors are targeting stocks like Square, which are just beginning to participate in the bull market of the last two years. Improving business fundamentals is one factor. However, many of these are catching a bid simply because fund managers are running out of “attractive” things to buy at current levels.
Source; TradingView.com
It seems like the bull case can be made for just about any stock or risk asset these days, as investors expect the Trump administration’s pro-business push and continued economic strength in the U.S. to drive prices even higher. Time will tell, but for now, the bulls just keep on buying. |
