By: Steve Bruce
If you hold a meaningful allocation to international equities, this past week has been a painful one.
Since 2008, when the long-term trend of international ex-U.S. equities versus the Russell 3000 has been above its 200-day moving average, the last five trading days rank as the worst relative performance for international stocks compared to U.S. equities over that entire period.
A brutal stretch—no sugarcoating it.
Why We Still See Opportunity in International Markets
Despite this sharp drawdown, we continue to see significant upside potential in international ex-U.S. equities:
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Valuations remain attractive relative to domestic stocks.
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Earnings momentum is improving across many global regions.
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The long-term trend above the 200-day moving average remains intact.
What This Means for Your Portfolio
For portfolios heavily weighted toward U.S. equities and light on international exposure, weeks like this can serve as a constructive entry point. Gradual rotation into international equities can help diversify risk and position your portfolio for potential long-term gains.
Disclaimer: This content is for informational purposes only and is not investment advice.
Steve Bruce, CMT is the Co-Founder and Chief Investment Officer of Bruce Wood Capital, where he focuses on systematic global macro strategies and long-horizon, data-driven research