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Global stocks are still cheap
A weaker dollar and higher rates were starting to look like a strong catalyst for stocks outside the U.S. Europe started to outperform at the end of last year, whereas Emerging markets also showed some promise. The recent spike in treasury yields and rate expectations has paused that rally, leaving international stocks still cheap against the S&P 500.
Japan and Europe are great places. China, I would avoid because Chinese equities are destined to go to the same place as Russian equities.
I think that Europe and Japan normally trade at lower PEs than US equities is because the US consumer market continues to grow while the Japanese and European consumer markets remain stagnant. High taxation and high regulation make it more expensive for people living there to match the spending of Americans.
@dissectmarkets Makes sense. Having the largest capital markets and investor base, a large proportion of savings invested in equities and the reserve currency status of the USD also helps their domestic markets attract larger flows than the rest.
In Europe and Japan, I guess major indices might never outperform in the long run, but finding individual quality stocks could still work well.
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