EM today is up, what's going on?

[Totoro]

Reverse to the mean. Same Bogle said that too, no

Very curious what January will bring. It's bound to go a bit shaky.

 

[NW-Bound]

Well, I have been waiting a long time for that "reversion to the mean". Where is it?

Vanguard S&P Fund: up 29.2% in the last 5 years
Vanguard Total Stock Ex US: down -4.7% in the same period

 

[Totoro]

Five great years in 2003 - 2007, long bad streak until today. Who knows?
https://www.blackrock.com/investing...ation/asset-class-returns-one-pager-va-us.pdf

With a CAPE of around 15 vs. 26 or so in the USA and other valuation measures showing similar differences, there is a price gap implied of say 30%-50%.
Global Stock Market Valuation Ratios (Shiller PE, CAPE, PB...)

And earnings growth seems to be going along at least as well as US companies too. Profitability also. So fundamentals are keeping up it seems.

So every year it underperforms the gap widens ..

 

[Lsbcal]

Maybe the gap narrows by US stocks eventually going down?

There aren't any laws of physics in stock markets. Pragmatism pays.

 

[NW-Bound]

OK. That means that by holding EM and international stocks, I will lose less.

 

[Lsbcal]

OK. That means that by holding EM and international stocks, I will lose less.

Good comeback.