Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
"Investors are increasingly souring on the United States, as illustrated by the declining dollar, the stalled stock market and rising government borrowing costs."
"Investors are increasingly souring on the United States, as illustrated by the declining dollar, the stalled stock market and rising government borrowing costs."
"The sentiment started to take hold in financial circles after the shock of sky-high tariffs sent stocks and bonds into a tailspin last April, but it has taken off recently as the Trump administration has pursued policies like attacks on the Federal Reserve’s independence and threats of a new trade war with Europe that are worrying investors anew."
"A new investment thesis has spread through global markets at the start of 2026, as trading strategies long built on the primacy of the United States now opt for a new approach: Sell America."
So poor leadership can sink both the markets and the general economy at the same time? Wild.
And, as we have seen, it requires a concerted effort to cause such big changes. A lot of poorly-conceived concerted efforts. An abject lesson in what not to do.
Anyone care to share their international equity allocation? I am looking at 60% to avoid heavy tech weighting and generally high valuations.
I'm holding just about 5%, and only recently did most of that become Japanese. I'm dying to see the reaction over there after the Sunday election. But I'll be growing my foreign stake. ...OOPS, Schwab somehow does not classify my stake in BLX as foreign. Damn bots... Probably cuz their economy is dollarized. That brings us to a foreign portion in the portfolio to 11.72%. I'll be looking to grow it further.
Re "Sell America". It makes a catchy headline. I get it. On a guttural level I might agree. Two investment reasons for doing so might be to (1) diversify currency exposure or (2) spread your equity risk around as different economies peak and fall at different times. If the first reason, make sure your fund doesn't hedge back to the U.S. dollar because that is often the case.
Let's look at it from the perspective of global dominance (from Bing's AI):
The United States dominates the global stock market in terms of market capitalization, accounting for over 50% of the world's total—a figure that has risen to as high as 62% in recent years. As of early 2026, the U.S. market cap stands at approximately $40.3 trillion, far surpassing the next largest markets.
United States:
Market Cap: $40.3 trillion (as of 2022, with estimates suggesting continued growth) Represents ~48.6%–62% of global market capitalization depending on the source and timeframe. Home to 6,062 listed firms, including tech giants like Apple, Nvidia, Microsoft, and Amazon
Top Global Competitors:
China: $11.5 trillion (~12.6% of global market cap) Japan: $5.4 trillion (~5.0%) India: $3.6 trillion (~4.2%) United Kingdom: $3.1 trillion (~2.6%) Canada: $2.7 trillion (~2.4%)
Re valuations. There's an abundance of evidence that the S&P is richly valued. That is not necessarily the case with those companies outside the Magnificent 7**who's whose market cap weighs heavily. I don't think you need to look too hard to find value in some U.S. large caps along with mid-caps or small-caps.
My own exposure? I don't really believe Fido's analytic tool. It says I'm only 33% in equities. It also says about 1/3 of those are non-U.S. That's probably in the ballpark. But much of that comes from a real assets fund. A lot of natural resource companies reside outside the U.S. All might do well to take that into consideration. They might have more foreign exposure than assumed.
In my individual stock basket (5% of total assets) I've intentionally included 5 foreign stocks for diversification purposes:
Anyone care to share their international equity allocation? I am looking at 60% to avoid heavy tech weighting and generally high valuations.
My foreign exposure, per M* X-ray is now about 8% of my entire portfolio. At the start of the year it was closer to 4%. I am late to the game, and moving in steps. I might do another 2% today at COB. I doubt if I go beyond 20% INTL, 40% U.S. equity and 40% FI/cash. I am moving more U.S. equity to SMID/index and away from growth.
Besides allocation amounts, what regions, funds or sectors are recommended for 2026? My moves, so far have been in my 401K, with limited (broad index) options.
Is a broad approach best here? Or more focus? Latin America seems to have surged this year. Europe is probably more stable. Asia? Middle East and Africa?
Growth, Index, energy, minerals, tech? I am just starting my research. What are you all looking at? @rforno Thanks - RERGX looks like it is broadly spread out between Europe and Asia, with a smattering of Latin America, and index-like qualities. I like that.
@rforno- I have no idea re RWMGX or RERGX, but we did very well with WaMu and EUPac Growth many years ago. For many years we primarily used AF in our accumulation phase.
Like other fund companies at the time AF did have a high front load (about 5% if I recall correctly), but that load was stepped so as to decrease as we gradually built our accounts. A nice thing about AF was that they combined the values of our two IRA accounts and the trust account to calculate the load, and we did reach a level where there was no load at all. Also, unlike some other fund companies, the load did not apply to any reinvested dividends.
There is nothing wrong with cheap int’l index funds. They provided over 30% total return that cost several basis points. We use broad based developed market index funds as the base. For EM, i prefer actively managed funds for their stock and region picking.
Not necessary a recommendation for everyone. i am trying to consolidate my many funds to a dozen or less funds and ETFs.
Thanks for the post. Some good points. Tends to support my reallocation to U.S. Index, SMIDs and some broad-based INTL exposure. And, yes, my rational is all about "different economies (and sectors) peak(ing) and fall(ing) at different times
There is nothing wrong with cheap int’l index funds. They provided over 30% total return that cost several basis points. We use broad based developed market index funds as the base. For EM, i prefer actively managed funds for their stock and region picking.
Not necessary a recommendation for everyone. i am trying to consolidate my many funds to a dozen or less funds and ETFs.
I tend to agree. And have been consolidating for a few years now.
@rforno- I have no idea re RWMGX or RERGX, but we did very well with WaMu and EUPac Growth many years ago. For many years we primarily used AF in our accumulation phase.
Like other fund companies at the time AF did have a high front load (about 5% if I recall correctly), but that load was stepped so as to decrease as we gradually built our accounts. A nice thing about AF was that they combined the values of our two IRA accounts and the trust account to calculate the load, and we did reach a level where there was no load at all. Also, unlike some other fund companies, the load did not apply to any reinvested dividends.
They indeed are WaMu and EuPAC Growth (which got renamed due to SEC rules last year) - great minds think alike! These are in my 403b so no loads are paid, thankfully .... and the AFs I own in one of my taxable account more than qualify me for discounted loads if I ever wanted to buy more of their stuff, too.
Note that the second largest economy to the U.S. is China. Why would one feel "safer" there than at home? Might be like leaping out of the kettle into the fire.
There is nothing wrong with cheap int’l index funds. They provided over 30% total return that cost several basis points. We use broad based developed market index funds as the base. For EM, i prefer actively managed funds for their stock and region picking.
Not necessary a recommendation for everyone. i am trying to consolidate my many funds to a dozen or less funds and ETFs.
So far, LVHI is working out well in my Wife's IRA. We both have IDOG in our taxables.
Anyone care to share their international equity allocation? I am looking at 60% to avoid heavy tech weighting and generally high valuations.
When I evaluated my portfolio at the beginning of the year, international equities comprised 42.00% of the equity allocation. International equities constituted 25.22% of the entire portfolio.
Note that the second largest economy to the U.S. is China. Why would one feel "safer" there than at home? Might be like leaping out of the kettle into the fire.
The Chinese government has a history of capricious industry interference (e.g., tech, education). The communist government prioritizes its own goals which may not yield optimal financial results. Financial reporting veracity for Chinese companies has been repeatedly questioned. Profits for U.S. investors in China were negligible after the country was admitted to the WTO despite a subsequent considerable increase in their GDP. I won't get into all of China's unscrupulous activities against the U.S.—suffice to say the country's leaders would celebrate if the U.S. failed economically, politically, or militarily. I would be comfortable with zero exposure to Chinese markets regardless of the return potential.
Edit/Add: Recently, one of my foreign equity funds had 7.8% allocated to China¹ while my other foreign equity fund had no exposure to Chinese equities².
¹ Hong Kong equities: 2.10% ² Hong Kong equities: 4.7%
Comments
https://www.semafor.com/article/02/04/2026/us-proposes-rare-earth-trading-bloc-with-allies
At long last, Rip Van Winkle awakes.
And also close the Kennedy Center for good measure.
I would expect that many who are a little late, like me, will be forcing momentum in that direction.
They must have figured out that Greenland and Venezuela are not some quick fix.
I still waffle between going from 100% RWMGX (AF WaMu) to a 60/40 split between that and RERGX (EUPac Growth) in my 403b.
Re "Sell America". It makes a catchy headline. I get it. On a guttural level I might agree. Two investment reasons for doing so might be to (1) diversify currency exposure or (2) spread your equity risk around as different economies peak and fall at different times. If the first reason, make sure your fund doesn't hedge back to the U.S. dollar because that is often the case.
Let's look at it from the perspective of global dominance (from Bing's AI):
The United States dominates the global stock market in terms of market capitalization, accounting for over 50% of the world's total—a figure that has risen to as high as 62% in recent years. As of early 2026, the U.S. market cap stands at approximately $40.3 trillion, far surpassing the next largest markets.
United States:
Market Cap: $40.3 trillion (as of 2022, with estimates suggesting continued growth) Represents ~48.6%–62% of global market capitalization depending on the source and timeframe. Home to 6,062 listed firms, including tech giants like Apple, Nvidia, Microsoft, and Amazon
Top Global Competitors:
China: $11.5 trillion (~12.6% of global market cap)
Japan: $5.4 trillion (~5.0%)
India: $3.6 trillion (~4.2%)
United Kingdom: $3.1 trillion (~2.6%)
Canada: $2.7 trillion (~2.4%)
In table format here's a Wikipedia article.
https://en.wikipedia.org/wiki/List_of_countries_by_stock_market_capitalization
Re valuations. There's an abundance of evidence that the S&P is richly valued. That is not necessarily the case with those companies outside the Magnificent 7 **
who'swhose market cap weighs heavily. I don't think you need to look too hard to find value in some U.S. large caps along with mid-caps or small-caps.My own exposure? I don't really believe Fido's analytic tool. It says I'm only 33% in equities.
In my individual stock basket (5% of total assets) I've intentionally included 5 foreign stocks for diversification purposes:
U.S. 15
Japan 2
New Zealand 1
Holland 1
Canada 1
** Here's a link to a recent Motley Fool article re the Mag 7's market dominance:
https://www.fool.com/research/magnificent-seven-sp-500/
A work in progress.
My moves, so far have been in my 401K, with limited (broad index) options.
Is a broad approach best here? Or more focus? Latin America seems to have surged this year. Europe is probably more stable. Asia? Middle East and Africa?
Growth, Index, energy, minerals, tech? I am just starting my research. What are you all looking at? @rforno Thanks - RERGX looks like it is broadly spread out between Europe and Asia, with a smattering of Latin America, and index-like qualities. I like that.
Like other fund companies at the time AF did have a high front load (about 5% if I recall correctly), but that load was stepped so as to decrease as we gradually built our accounts. A nice thing about AF was that they combined the values of our two IRA accounts and the trust account to calculate the load, and we did reach a level where there was no load at all. Also, unlike some other fund companies, the load did not apply to any reinvested dividends.
Not necessary a recommendation for everyone. i am trying to consolidate my many funds to a dozen or less funds and ETFs.
Thanks for the post. Some good points. Tends to support my reallocation to U.S. Index, SMIDs and some broad-based INTL exposure. And, yes, my rational is all about "different economies (and sectors) peak(ing) and fall(ing) at different times
MOWNX CVISX BISAX BAFJX and BAFQX along with Europe and defense and some individual names in Europe and Scandinavia
international equities comprised 42.00% of the equity allocation.
International equities constituted 25.22% of the entire portfolio.
The communist government prioritizes its own goals which may not yield optimal financial results.
Financial reporting veracity for Chinese companies has been repeatedly questioned.
Profits for U.S. investors in China were negligible after the country was admitted
to the WTO despite a subsequent considerable increase in their GDP.
I won't get into all of China's unscrupulous activities against the U.S.—suffice to say
the country's leaders would celebrate if the U.S. failed economically, politically, or militarily.
I would be comfortable with zero exposure to Chinese markets regardless of the return potential.
Edit/Add: Recently, one of my foreign equity funds had 7.8% allocated to China¹
while my other foreign equity fund had no exposure to Chinese equities².
¹ Hong Kong equities: 2.10%
² Hong Kong equities: 4.7%