A Global Shift: Why I’m Moving My Money Out of U.S. Stocks, Following in Warren Buffett’s Footsteps

As the U.S. stock market continues to face headwinds, many investors are reassessing their portfolios and considering a global shift. While domestic stocks have been a staple in many portfolios, the recent performance of foreign markets has been nothing short of spectacular. In fact, if you had invested in non-U.S. stock markets this year, you would have made a significant return.

One of the most notable examples of this is the iShares MSCI EAFE ETF (EFA). This ETF tracks the performance of developed markets outside of the U.S. and Canada, providing exposure to a diverse range of international stocks. With a current yield of 1.43%, this ETF has returned over 20% year-to-date, significantly outperforming the S&P 500.

Another ETF worth considering is the Vanguard FTSE Developed Markets ETF (VEA). This fund tracks the performance of developed markets globally, excluding the U.S. and Canada. With a low expense ratio of just 0.04%, this ETF has returned over 25% year-to-date, making it an attractive option for investors looking to diversify their portfolios.

The performance of these ETFs is a testament to the growing importance of international markets in the global economy. As the world becomes increasingly interconnected, investors are recognizing the value of diversifying their portfolios across different regions and asset classes.

But why is this happening now? One reason is the strong economic growth in many emerging markets. Countries such as China, India, and Brazil are experiencing rapid expansion, driven by a combination of demographic trends, technological advancements, and infrastructure development. As these countries continue to grow, their stock markets are likely to follow suit.

Another reason is the increasing adoption of ESG (Environmental, Social, and Governance) investing. As investors become more aware of the importance of sustainability and responsible investing, they are seeking out ETFs that align with their values. The iShares MSCI EAFE ETF, for example, has a strong ESG track record, with a score of 6.8 out of 10 from Sustainalytics.

So, what does this mean for investors? It means that now is a good time to consider adding non-U.S. stocks to your portfolio. With a range of ETFs available, investors can easily gain exposure to international markets and diversify their portfolios. Whether you’re a seasoned investor or just starting out, it’s worth exploring these options and seeing how they can help you achieve your financial goals.

What to Watch Next:

• Emerging market growth: As emerging markets continue to grow, their stock markets are likely to follow suit. Investors should keep a close eye on these markets and consider adding them to their portfolios.
• ESG investing: As investors become more aware of the importance of sustainability and responsible investing, ESG ETFs are likely to become increasingly popular. Investors should consider adding ESG-focused ETFs to their portfolios to align with their values.
• Global economic trends: The global economy is constantly evolving, and investors should stay up-to-date on the latest trends and developments. This will help them make informed investment decisions and stay ahead of the curve.

Conclusion:

The performance of non-U.S. stock markets this year has been a wake-up call for many investors. With a range of ETFs available, investors can easily gain exposure to international markets and diversify their portfolios. Whether you’re looking to capitalize on emerging market growth or align with your values through ESG investing, now is a good time to consider adding non-U.S. stocks to your portfolio. By doing so, you may be following in the footsteps of investing legends like Warren Buffett and achieving your financial goals in the process.