1. S&P 500 is up 10% this year despite trade turmoil. 2. Foreign stocks outperform U.S. stocks, with an ACWX increase of 21%. 3. A 7% decline of U.S. dollar benefits foreign investments. 4. Investors advised to diversify portfolios with foreign stocks. 5. Tech concentration makes U.S. stocks pricier compared to international options.
The article suggests that declining confidence in U.S. leadership may decrease demand for U.S. assets, including SPY. Historical examples like the 2008 financial crisis showed how foreign market changes can depress U.S. equity valuations.
The likelihood of impact stems from changing investor behavior towards foreign assets, which could result in reduced SPY demand. The emphasis on diversification indicates a pivot away from U.S. stocks may be imminent.
Short-term impacts are likely as rising foreign stock appeal may prompt shifting allocations from U.S. investments. In the past, changes in market sentiment often triggered immediate portfolio adjustments.