The Clock Is Ticking On U.S. Outperformance
The valuation gap between international and U.S. stocks is at levels not seen since 2000; a period which resulted in 20+% annual international equity outperformance. The correlation between valuations and subsequent returns becomes incredibly tight over a multi-year horizon, with the R-squared rising to 0.97 over a 10-year period. Currency performance should turn from a…