You May Be Neglecting These Important Stocks

Right now is the time to shop for these stocks... SPECIAL OPPORTUNITIES [The Oxford Club Special Opportunities]( You May Be Neglecting These Important Stocks Matt Benjamin, Senior Markets Expert, The Oxford Club [Matt Benajmin] There's an entire category of stocks you may be neglecting. And right now is the time to shop for them, because several factors are making them extreme bargains... a situation that may not last long. I'm talking about international stocks - or, more accurately, non-U.S. stocks. Of course, this is a huge category, and it contains stocks of incredible diversity. The current outlook for, say, German stocks is quite different from the current outlook for British or Japanese stocks. And that's just advanced economies. Emerging market stocks are an entire other category, one that includes companies from China, South Korea, India, Brazil and many other nations with extremely different outlooks and prospects. And in an economy like this one, it's very much to your benefit to figure out where outside the U.S. you want to invest. But remember, The Oxford Club recommends that you allocate a significant portion of your portfolio - about 30% - to non-U.S. stocks. Doing so provides balance to your portfolio, as these stocks tend to zig when U.S. stocks zag. [Oxford Asset Allocation Model]( By the way, Alexander Green's Gone Fishin' Portfolio has the exact same allocation (Alex is our Chief Investment Strategist after all). And if you're interested in greater access to Alex's industry-leading insights, you'll want to check out The Oxford Communiqué Pro. [Go here for more information.]( Why Now? So you're probably asking... why now? After all, international stocks (excluding U.S. stocks) are down 22% this year, as measured by the iShares MSCI ACWI ex U.S. ETF (Nasdaq: ACWX). (ACWI stands for All Country World Index.) Compare that with the S&P 500, which is down about 19% this year (it's been a tough year for investors everywhere on the planet!). And according to Morningstar, U.S. stocks have outperformed international stocks in 10 out of the last 12 years. But ignoring international stocks on that data alone would make us guilty of recency bias, or placing too much emphasis on more recent events. Consider the fact that international stocks have outperformed U.S. stocks during nearly half of all time periods over the last 50 years, according to Morningstar and BlackRock. That's why the Club advocates a healthy allocation to non-U.S. stocks. We looked at a longer historical timeline and realized these stocks do perform well for significant periods... and we don't want to miss out on that growth when it materializes, as it eventually will. And as I mentioned a moment ago, these stocks are a bargain right now. For two reasons... First, their valuations are very attractive. According to [Yardeni Research]( the forward price-to-earnings ratio for U.S. stocks is 17.1, while EAFE stocks - which include stocks in Europe, Australia/New Zealand and Japan - are trading at just 12 times forward earnings. Meanwhile, emerging markets stocks are even cheaper, at 11.2 times forward earnings. Second, the U.S. dollar is trading against most other currencies at multiyear highs. That means you get more for your dollars when you're shopping for stocks abroad (just like you get more for your money as a tourist in Paris or Tokyo these days). But, of course, currency movements are cyclical, and few foreign exchange analysts or economists expect the current level of dollar strength to continue for long. Thus, if you're shopping for non-U.S. equities, now is the time. Where to Invest Abroad But as I wrote above, there is incredible diversity among international stocks. The biggest divide is between advanced and emerging market countries. Emerging market stocks have enormous potential. And many emerging market indexes are heavily weighted in Chinese stocks. That's for good reason, as China (including Hong Kong) is the world's second-largest economy. It has posted rapid GDP growth in recent decades and spawned world-class companies, like Tencent Holdings (OTC: TCEHY), Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD). The top 10 holdings in the well-known MSCI Emerging Markets Index, as tracked by the iShares MSCI Emerging Markets ETF (NYSE: EEM), include five Chinese stocks and one Taiwanese stock. But emerging market stocks come with an added level of risk. Many emerging market countries are run by dictators or autocratic regimes that run unfree economies. And unfree regimes - like China's Communist Party - can intervene in markets arbitrarily, sending stocks plummeting. In fact, that's just what happened in 2021. If you want to invest in emerging markets but not stocks from nations that are ruled by autocrats or lack fundamental economic freedoms, there is an exchange-traded fund (ETF) for that. If you'd rather stick to advanced economies for your helping of international equities, an alternative is the iShares MSCI EAFE ETF (NYSE: EFA), which tracks the performance of large cap and midcap stocks in developed countries around the world, excluding the U.S. and Canada. The index is made up primarily of stocks from Japan, the United Kingdom, France, Switzerland and Australia. And if you're looking for value stocks in this category, try the iShares MSCI EAFE Value ETF (CBOE: EFV), which mirrors the performance of stocks in developed countries (excluding the U.S. and Canada) that are trading at a discount to other stocks in their industries. So if you, like many of us, have neglected international stocks, now is the ideal time to pick some up on the cheap. The ETFs I mentioned today are a great place to start. Invest wisely, Matt [The Oxford Club] You are receiving this email because you subscribed to Oxford Club Special Opportunities. Oxford Club Special Opportunities is published by The Oxford Club. Questions? Check out our [FAQs](. Trying to reach us? [Contact us here.]( Please do not reply to this email as it goes to an unmonitored inbox. [Privacy Policy]( | [Whitelist Oxford Club Special Opportunities]( | [Unsubscribe]( © 2022 The Oxford Club, LLC All Rights Reserved The Oxford Club | [105 West Monument Street](#) | [Baltimore, MD 21201](#) North America: [1.800.589.3430](#) | International: [+1.443.353.4334](#) | Fax: [1.410.329.1923](#) [Oxfordclub.com]( Your Legal Questions... Answered What is The Oxford Club? The Oxford Club is a financial publisher with a highly rated track record. We deliver unique and well-researched financial and investment ideas to our Members. What do you do? 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