One of the strategies for success with investing in stocks is to diversify one’s portfolio across asset classes. This may include owing both US and foreign stocks. It is wise to have international stocks in addition to the domestic peers because their outperformance varies over a period of time. Generally foreign stocks have outperformed their US peers lasting many years at time and vice versa. US stocks have strongly beaten from 2008 to 2021. However last year international stocks outperformed for the first time in many years.

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Source: Uncovering International Investment Opportunities, Franklin Templeton

It remains to be seen if foreign stocks’ outperformance would continue thru this year and beyond.

Related ETFs:

• SPDR S&P 500 ETF (SPY)
• Vanguard S&P 500 ETF (VOO)
• iShares MSCI Emerging Markets ETF (EEM)
• Vanguard Developed Markets Index Fund ETF (VEA)

Disclosure: No positions

Most of the foreign bank stocks were in the red around this time last year. However it is a better story this year with most of them up at least so far. The top performers are from Argentina which is permanent basket case of a mismanaged economy. Unlike 2022, Brazilian banks have not shot up high though they are in the positive. Notable among the banks down YTD are British banks excluding HSBC and Bancolombia of Colombia.

The following table shows the year-to-date returns of foreign bank stocks:

Note: The returns noted above are excluding dividends

Source: BNY Mellon

It remains to be seen if these banks would add further gains thru the reminder of this year.

Disclosure: Long BCH, CIB, ITUB, BBD, BBVA and SAN