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Consider: the Euro was launched at the exchange-rate of 1 E = $1.15. It’s gotten as low as $0.85, then as high as around $1.60, recently almost falling back to $1.00, before its recent gentle upwards bump… back to essentially the initial exchange-rate.
This isn’t a forum on Forex, or a trading-pit, so I’m not soliciting advice on forecasting of currency fluctuations. Instead, I pose the question: since the US economy has broadly recovered better since 2009, than has the European economy (let’s please elide here the question of material inequality), ought we to have good reason to suppose, that the European economy offers more opportunity going forward? Or is this akin to the gambler’s fallacy, where a desperate addict switches to the slot-machine that’s recently offered only losses, in hope that reversion to the mean would engender in the machine a greater largess?
I've been shifting more money to international. I stick with VXUS so I don't have to pick whether it's Europe or emerging markets.
Edit to add, But I wonder why today the market in Europe is all red. Glad I took my profits yesterday. But I did shift some of my kid's money to an international mutual fund at Vanguard today. I hope it's a right move.
Last edited by NewbieHere; 07-21-2017 at 09:58 AM..
european stocks have underperformed u.s stocks since 1980 , they have never once led a bull market , the european equivelent of the dow ( euro stoxx 50 ) made its all time high in 1999
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Originally Posted by irish_bob
european stocks have underperformed u.s stocks since 1980 , they have never once led a bull market , the european equivelent of the dow ( euro stoxx 50 ) made its all time high in 1999
Precisely why I hold no int'l except what little % is in my VG Wellington. Most int'l mutual funds hold a lot of Euro stocks, and the claim that a person needs them for diversification is nonsense.
Seems to me that most of the time when US markets are down, the Euro market is just as bad or worse. So much for diversification out of US stocks. My brief foray into an Asian mutual fund made me some money, but I'm glad I got out when I did.
They do go down in unison but the US stock market ytd is about 9% and international is about 15%. Granted, I'm not a long termer in anything. I'm just a trend catcher.
Seems to me that most of the time when US markets are down, the Euro market is just as bad or worse. So much for diversification out of US stocks. ...
I don't disagree. But that begs the question: is there some persistent, endemic relationship here - or not? And if not, is there any reasonable expectation for some reversion to the mean - implying that we ought to eventually have an extensive period of time, where during a rally, the European stocks rally more than American ones, and during a bear-market, the European stocks fall less than American ones?
In other words, I am wondering whether American companies have an inherent advantage (culture, resources, regulatory environment, labor costs, etc.), in which case it's reasonable to expect European stocks to keep underperforming, in good times or bad times alike; or, if there really is no such advantage, in which case hope for a long-term rotation into European equities is reasonable.
Unlike some others here, I am not a trader or a trend-follower. At the risk of being facetious, my question is, what happens if I fall asleep now, and awake in the year 2100?
You basically ask people whether they have a crystal ball. The US stock market did nothing, if you buy and hold from Jan 1, 2002 to Jan 1, 2005 while the international stock may have performed a bit better, maybe 10-15% for similar period. Of course this is buy and hiold only, no new money in between.
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