Comment by toomuchtodo
6 hours ago
Not investing advice.
I diversified away from the US to international equities VTI -> VSUX starting at the beginning of the year. My thesis is that trade is rearranging due to US trade policy. If you look at the S&P500, growth has been flat since 2022 for anything that isn't Big Tech AI bubble. Therefore, I believe that between go forward US economic policy and global trade reconfiguration, non US will outperform the US over the next five years.
I also adjusted some towards VXUS which was a great move in hindsight from fx alone. I bought property in the EU a couple years ago which is also benefiting from fx moves.
With that said, the biggest US companies are pretty exposed internationally already. I'm not sure someone needs to or it would be prudent to say dump VOO and move to VXUS 100%.
Agreed; to be clear, I still have US equities exposure, but it has been reduced to <50% of my total securities portfolio. This balances, imho, potential gains with managing risk around valuations. "Be fearful when others are greedy."
Maybe not investing advice but reasonable-sounding nonetheless.
The thing is, if you accept the Trump Tariffmania (and the associated move to balance trade and export more), then the dollar would have to continue lower, so you (as a US investor) would benefit just on that thesis alone.
It's the reverse for EU investors, where you have to now accept pretty big currency risks to ride the A.I train (If you add in the EUR/USD rally I think you're flat to negative on your SP500 as an EU investor for example).