Right, but an added dimension is that US administrations have a history of targeting foreign countries economically when an economic threat is perceived. This happened in the 1980s when the US took on Japan, and now with China. This makes ex-US investment even more questionable. Do you want to bet that the reaction of the US to a rising power won't be effective? The US has powerful tools at its disposal (that other countries don't) as we've seen with both Japan and China.Semantics wrote: ↑Mon Sep 14, 2020 9:50 pm I don't know why people are citing data from the 1970s. Totally irrelevant to today's globalized and connected world. US has outperformed because big US companies have been siphoning trillions of dollars out of other countries, dominating in those markets just like they've dominated at home (where small cap value has also underperformed). Barring a major change in the world order, I see no reason to invest anywhere other than the US and China for the foreseeable future, although I do hold a few emerging markets tech stocks like SE as well.
For example, you mentioned that there may be reason to invest in the Chinese stock market. Indeed, but do you want to take the risk when considering the economic war that's going on? Even if I was willing to take the risk, it would be with such a small part of my portfolio that it wouldn't be worth the trouble and complexity. Similarly, if Europe suddenly became much stronger and an economic threat (unlikely, I know), you would have to worry about the US reaction to that if you invest there.
Like you basically said, barring a major change in the world order and financial system, the cards are ultimately stacked against you as an ex-US investor, and such a change in the world order isn't on the horizon by any means.