My first post here

S&P 500 and Nasdaq 100 rose +16% and +20% respectively.

However, the US posted one of the WORST years on a relative basis over the last 3 DECADES.

That does not sound like an exceptionalism.

What is happening?

US equities underperformed the rest of the world by nearly -15 percentage points, the biggest margin since 2009, the last year of the Financial Crisis.

Investors sought diversification, rotated into more attractively valued markets, and reduced concentrated exposure to US.

Including dividends (total return), the US lagged the MSCI World ex-USA by the most since 1993!

This was also the first year of underperformance since 2022 and only the 4th in 15 years.

This was partially driven by emerging market equities, which soared +34%, supported by improving liquidity conditions, and rate cuts globally.

In other words, EM markets outperformed the US by 18 percentage points.

As a result, Bloomberg Emerging Markets Capital Flow Proxy Index posted the biggest capital inflows since the last year of the Financial Crisis.

Investors are pouring more money into emerging market assets than at any point over the last 16 years.

Among individual countries, South Korea, Peru, Spain, Poland, and Greece were the best performers in 2025.

South Korea beat the US by a remarkable 79 percentage points!

In fact, the US was the 13th WORST market in 2025 when considering total return in USD.

As more money flowed into equities outside the US, the Dollar saw one of the worst years in over 2 decades.

The US Dollar Index recorded a -9% decline in 2025, the 2nd-worst year since 2003.

One would say, but the AI trade has been remarkably strong, look at the Magnificent 7!

Nothing could be further from the truth.

Although the Mag 7 returned +25% last year, most of the group’s stocks actually lagged the S&P 500.

This was also below the return of global stocks.

One might also say I’m simply explaining the past.

Maybe so, but I’ve been putting my money where my mouth is.

My portfolio gained +39.46% in 2025, beating the S&P 500 by 13.07 percentage points.

Since January 2024, it has returned +72.30%, beating S&P by 28.78 ppts.

Why is this all important?

Because too many investors remain fixated on a single market, missing the broader global landscape and leaving massive money on the table.

The world has shifted, leadership has rotated, yet many portfolios still look like years ago.

They are also exposing themselves to far greater downside if an adverse event hits, potentially even more damaging than what we saw in April 2025, when a single shock caused a violent unwind.

By ignoring what’s happening beyond the US, massive opportunities are sacrificed.