Maybe, just maybe, history repeats itself to help us remember.
The U.S. markets have just completed the strongest fifteen-year stretch in modern history. From the post-crisis lows of 2009 to the record highs of 2025, the Dow climbed from roughly 7,000 to over 40,000, powered by technology giants that redefined innovation and wealth creation. It has been an extraordinary era, fueled by globalization, digital transformation, and more than a decade of near-zero interest rates.
While U.S. markets soared, much of the rest of the world lagged until now. This year, international equities have quietly delivered strong performance, largely unnoticed by most investors. Has the tide finally turned? Recent analysis suggests a potential rotation is underway, with non-U.S. stocks outperforming U.S. equities by nearly 10% year-to-date.1
Remembering the Last Cycle
Two decades ago, international investing was the hottest trend in finance. Brazil, Russia, India, and China, the “BRICs,” were the Facebook, Apple, and NVIDIA of their time. Financial magazines touted the promise of China and the unstoppable rise of emerging markets. Global fund managers specializing in international equities were treated like rock stars until the music stopped in 2007.
Since then, global markets have largely trailed their U.S. counterparts. China’s stock market, once a symbol of global expansion, has yet to reclaim its former highs. Meanwhile, U.S. equities became the world’s default growth engine. By the end of 2024, global capital had flooded into U.S. markets even as valuations stretched to historic extremes.2
The World of Value Today
But markets, like tides, always turn. Many international economies now trade at meaningful discounts, not only relative to the U.S., but also to their own long-term averages. From Europe to Southeast Asia to Latin America, opportunities are emerging in industries that blend real production with fiscal discipline such as shipping, agriculture, energy, manufacturing, and infrastructure.
Emerging and frontier markets are entering a new phase, one defined less by speculative growth and more by pragmatic stability. Many have strengthened their balance sheets, reduced external debt, and expanded trade alliances outside the U.S. dollar system. In doing so, they have become quietly investable.3
Hard Assets, Human Capital, and Patience
Investing abroad isn’t about chasing yield. It’s about rebalancing exposure toward regions where growth and value intersect. Infrastructure modernization in Southeast Asia, energy independence efforts in Europe, and industrial revitalization in Latin America are reshaping global capital flows. Long overlooked, these regions are now drawing renewed interest from both institutional and private investors.
Currency dynamics are also playing a role. The U.S. dollar, which strengthened dramatically from 2012 to 2025, is beginning to show signs of fatigue, a shift that historically favors international equities.4
The Turning Point
Even as the U.S. economy shows signs of slowing, domestic markets continue to set record highs. Yet beneath the surface, a long-overdue rebalancing may already be underway. Sectors inflated by cheap credit are cooling, while undervalued areas, both in the U.S. and abroad, are coming back to life.
International markets, once dismissed as underperformers, are quietly leading year-to-date. Whether this represents a short-term rotation or the beginning of a broader secular shift remains to be seen. History, however, reminds us that leadership rarely stays in one place forever.
For investors with patience and perspective, the case for investing abroad is not about prediction. It’s about remembering the rhythm of cycles and the enduring value of diversification.
Kumbie Mtunga
- MSCI Inc. Five Takeaways for Country Investing From 2025’s Historic Equity Shift. MSCI Research Blog, Apr 2025. https://www.msci.com
- Morningstar, Inc. Why 2025 Is the Year to Invest in International Stocks. Morningstar, Jan 2025. https://www.morningstar.com
- Johnson Financial Group. The U.S. Dollar and Why International Stocks Are Outperforming YTD. Johnson Financial Group Insights, May 2025. https://www.johnsonfinancialgroup.com
- GAM Investments. Five Reasons We’re Positive on Emerging Market Equities. GAM Research, 2025. https://www.gam.com