Why Investors Are Looking Beyond The U.S. Market

TL;DR

International markets outperformed the U.S. in 2025, pushing investors to diversify away from rising fiscal, geopolitical, and concentration risks.

Key Points

• 1.In 2025, developed international markets gained 32% and emerging markets 34%, compared to the S&P 500's 18%, with outperformance expected to continue into 2026.
• 2.The U.S. dollar fell over 9% in 2025 and is expected to weaken further, boosting returns on international stocks when overseas profits are converted back to dollars.
• 3.Concentration risk is a major concern: the Magnificent Seven alone account for roughly one-third of the S&P 500, tying U.S. exposure heavily to uncertain AI capital returns.