The Long Term Investor The Hidden Risks of U.S. Stocks and Why Global Diversification Still Matters (EP.190)
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Feb 5, 2025 The discussion dives into the hidden risks of over-relying on U.S. stocks, emphasizing that what goes up doesn't always stay up. It highlights historical cycles, revealing how market dominance shifts. Valuation gaps between U.S. and international stocks present new opportunities for savvy investors. Listeners are encouraged to confront their psychological biases and consider global diversification as a strategy for long-term success, risk management, and minimizing regret.
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The Cyclical Nature of Market Dominance
- The U.S. stock market's dominance is not permanent.
- Global diversification offers significant long-term opportunities.
The Importance of Diversification
- Market trends are cyclical, and past performance doesn't guarantee future success.
- Diversification is most valuable during market fluctuations.
Shifting Investor Preferences
- In 2011, investors favored international stocks due to past performance.
- Current U.S. market dominance has reversed this trend.