Last year at this time global markets were in free fall, but in late December 2018 they turned around and some indexes have recently hit all-time highs. More than 10 years into a bull market, U.S. stocks remain among the world’s best performers.
As of Monday’s, close, the S&P 500 index SPX, +0.63% had gained 24.2% in 2019, while the Nasdaq Composite Index COMP, +0.54% had soared 28.6%. That performance was topped only by highly speculative markets like Russia and Romania, which have gained 30%+ this year, though you could have booked a 4,200% gain by putting your chips on Venezuela at the beginning of 2019. If only…
Yet another round of uncertainty about a trade deal between the U.S. and China prompted a selloff Tuesday. And while share prices wax and wane based on news and rumors, the outperformance of U.S. stocks is no fluke. Although they may not be top dog again in 2020, they will still be a better long-term investment than equity alternatives: overseas developed and emerging markets stocks.
That’s because no matter what our problems are—and they’re amplified by 24/7 news and social media—the fundamentals of the U.S. economy and the growth prospects of leading U.S. companies top those of our global competitors.
I’ve been making this case almost as long as I’ve been writing this column, and during that time U.S. stocks have smoked those of the rest of the world. From the post-financial crisis bear market low of March 2009 through Monday’s close, the giant all-U.S. Vanguard Total Market Index ETF VTI, +0.65% has soared 481% while the broad-based developed markets iShares MSCI EAFE ETF EFA, +0.92% has climbed 194% and the popular iShares MSCI Emerging Markets ETF EEM, +0.76% has gained only 153%. Those numbers account for stock splits and