Expert insight
U.S. equity outperformance
February 04, 2025
In this 1-minute video, Vanguard Global Chief Economist Joe Davis discusses how the outperformance of U.S. stocks over non-U.S. equities has been surprisingly persistent. However, he notes that the gap will close eventually.
This video is one in a series of excerpts from a January 2025 webcast discussing our investment outlook. For more insights, visit our econ and market hub.
Read the transcript
Joe Davis: There's no doubt that the U.S. markets, particularly growth stocks in particular, have just dwarfed the returns on any other part of the financial markets, including international.
It has surprised us. But it's actually still within tolerance. The market is viable, but it's that 10 years out valuations at some point will play. And it could be because U.S. growth stocks are overvalued or because the rest of the world catches up.
It could be of either one. But there will be at some point some of that valuation gap to close.
Notes: All investing is subject to risk, including the possible loss of the money you invest. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Diversification does not ensure a profit or protect against a loss.
Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.