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OVER THE PAST YEAR, a new term has entered the lexicon: “Sell America.” The idea is that investors are losing confidence in the U.S. economy due to persistent deficits and concerns about other policy choices. Owing to these fears, some investors are pulling money out of U.S. stocks and reallocating to international markets. Others are opting for gold and silver. The result: In 2025, for the first time in a long time, international stocks demonstrably outpaced domestic equities, gold rose nearly 70% and silver more than doubled.
These trends have continued into 2026. Year-to-date, the S&P 500 is just fractionally positive. Meanwhile, global stocks outside the U.S. have gained 8.5%, with some international markets delivering even stronger returns. An index of Asian markets is up 17%.
Some analysts are now predicting a more fundamental shift away from U.S. markets. A recent Bloomberg headline read, “Anywhere but the U.S.” It argued that “U.S. exceptionalism is under pressure.”
Matthew Tuttle runs an investment firm in Connecticut. In a recent article, he argued that other countries are building a “kill switch” for U.S. technology. “The world is building optionality away from U.S. policy and platform dependence.” In France, he says, the government is encouraging companies to stop using Zoom. One German state has been moving government data away from Microsoft. Countries around the world, he says, are pursuing “digital sovereignty.”
Do these trends mean that we should all be pursuing Sell America strategies with our portfolios? Recent data might point in that direction. But I would proceed with caution, for two reasons.
First, there’s no guarantee that current trends will continue. Just in the past year, we’ve seen how quickly things can reverse. After years of middling performance, international stocks significantly outperformed. The proximate cause was White House policy, but as we’ve seen so many times in the past, policies aren’t permanent and often reverse. We’ll have another election in 2028. In the meantime, any number of other variables could affect investment markets at any time. Indeed, an unexpected reversal hit gold and silver just last week. Why? One explanation is that it was in response to the White House’s pick to lead the Federal Reserve. Whatever the cause, though, this is an example of how quickly things can change.
Another challenge with the Sell America trade is that commentators, at any given time, tend to focus most on the issues that are in the news. But surprises occur regularly. Look no further than the appearance of Covid-19 in 2020 or the advent of consumer-facing AI tools in 2022. Each had a material impact on investment markets, but neither was expected. This occurs all the time. When investors are looking left, something appears from the right. Whatever we’re all focused on today might be valid, but it represents just a fraction of what will actually occur in the future.
Some years ago, the consulting firm Callan developed what it calls the periodic table of investments. In a color-coded format, it illustrates the returns of various asset classes from year to year. What patterns does it reveal? In short, none. At any given time, it’s a patchwork. Markets can go from first to worst and then back again. This happens regularly.
The second problem with the Sell America trade—or any other tactical trade—is that even if we could forecast the future, that still wouldn’t guarantee investment profits. Howard Marks, a longtime investor and author, explains it this way: “In order to produce something useful,” he says, “you must have a reliable process capable of converting the required inputs into the desired output. The problem, in short, is that I don’t think there can be a process capable of consistently turning the large number of variables associated with economies and financial markets (the inputs) into a useful macro forecast (the output).”
You might, in other words, correctly forecast the result of the next election or how far the Fed will cut interest rates. Significant as those variables are, however, they are still just part of the immense number of moving parts that ultimately combine over time to drive markets. The result: An event that might appear to be positive can end up having no effect because of another, concurrent event, or because investors interpret an event in an unexpected way.
We saw this happen as recently as this week. On Wednesday, an employment report was released with results that were far better than expected. But when the market opened Wednesday morning, prices were mixed, with many stocks in the red. Why? At least two other factors were at play.
First, there’s the fear that a strong employment report—a sign of a strong economy—will cause the Fed to move more slowly in lowering rates. And since higher rates are generally bad for stocks, the result, counterintuitively, is that a strong employment report—an otherwise positive sign—can end up driving the market down.
Another reason stocks were weak on Wednesday: A theme in recent weeks has been the fear that AI will damage the software industry because it is getting so much better at writing code. This concept is known as “vibe coding,” and the idea is that, in the not-too-distant future, any layman will be able to create their own software on demand. That story ebbs and flows from the headlines, but it happened to be getting more discussion this week.
Investment markets, in other words, are like an old fashioned scale, constantly weighing a mix of factors—and stories—on each side. The challenge, though, is that no one has a complete picture of what factors will be on the scale at any given time.
To be sure, some forecasts do turn out to be accurate. If you have a view on how a particular policy will turn out, you could be right. The challenge, though, is that when we focus on just one factor—whether it be tariffs or the debt or an election—we’re looking at things through too narrow a lens.
For this reason, Warren Buffett has always emphasized the futility of making economic forecasts. “In the hard sciences, you know that if an apple falls from a tree, that it isn’t going to change over the centuries because of…political developments or 400 other variables… But when you get into economics, there’s so many variables…”
Retired Fidelity fund manager Peter Lynch perhaps said it best: “I’ve always said if you spend 13 minutes a year on economics, you’ve wasted 10 minutes.”
The Sell America trade may have some reasonable basis. But in the absence of a crystal ball, I’m not sure it’s sufficient enough for investors to dramatically alter their plans.
Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam’s Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
One of the posters below states that the US has been successful because of ”our ability to innovate, our rule of law, and lack of capital constraints”
I do not disagree but by any measure at least the first two factors have been destroyed by this administration. I can list the hundreds of habeas cases the current DOJ is telling judges to Get lost on( using a family safe term) just since January 1, the selling of pardons and influence to the highest bidder etc and the DOJ active surveillance of anyone who disagrees with Trump as concrete examples that the Rule of Law no longer applies.
In addition to the hundreds of millions of canceled scientific research grants, 16 of 27 heads of NIH institutes are vacant, because the incompetent hack who runs the NIH ( a health economist who has never done any medical research) is dancing to the tune of political operatives who appoint the VP friends. These hacks now have final say over funding research.
At the same time the world does not trust our word or commitments anymore. Even with a dramatic election, they know the US is only one bad election away from returning to this dark time.
People who think any of this is positive for the long term health of US stocks, or that it can be easily undone are mistaken.
The internet and social media have amplified visibility into America’s cultural and political issues, projecting them globally in real time. That exposure can distort foreign investor perceptions, but it doesn’t alter a basic geopolitical reality: the Cold War framework is long gone, and nations are responsible for addressing their own structural challenges. The US is reverting to the mean.
This shift is not all negative. In fact, greater policy divergence and regional differentiation can enhance cross-border return dispersion. For diversified investors, that means access to less-correlated markets and a broader opportunity set. If this means that money is shifting away from the US, our corporations need to work harder to attract capital and our politicians should consider bringing society together as a strategy rather than what was practiced in the past.
I keep a healthy portion of my investments in small cap and international index funds. They did well last year and, so far, this year. The last time I rebalanced was during 2022, I mixed more towards international as my portfolio had grown in US large cap beyond my targets.
European companies have been negative on Microsoft, Google, Apple, et al for a long time. When I met with some around 2010 they were that way. I do not have any recent experience, but i doubt that has changed.
I still believe in US companies. There may be one or two year blips, but long term I am bullish on USA.
The markets tend to signal leadership, rarely is the answer “all in” or “all out.” The key is recognizing when leadership changes and adjusting thoughtfully, not emotionally.
What do I mean?
From January 2000 to January 2010, the S&P 500 clearly lagged—it delivered a “lost decade” with negative total returns over that 10-year stretch. During that period, I allocated most of my portfolio to value stocks, small caps, and international equities.
After 2010, U.S. large caps took the lead, so I shifted primarily into that segment.
Since 2025, I’ve posted on several forums that value and international stocks appear to be leading again. Year-to-date performance supports that view.
For value exposure, examples include Vanguard Value ETF (VTV) or Schwab U.S. Dividend Equity ETF (SCHD).
For international exposure, Vanguard Total International Stock ETF (VXUS) is a broad option.
I also like a few actively managed global funds such as First Eagle Global Fund (SGENX/SGIIX/FEGE), and Thornburg Investment Income Builder Fund (TIBIX). The expense ratios are higher, but in some cases the active global allocation and risk management have justified the cost.
I’ve never fully accepted the idea that you must always remain strictly diversified across all categories. That can mean holding a lagging segment for a decade or more. At the same time, rigid diversification can prevent you from increasing exposure to areas that are clearly demonstrating sustained leadership.
For me, it’s about being flexible, diversified enough to manage risk, but willing to tilt meaningfully when the evidence supports it.
Its good to diversify with world markets….there are always cycles. But let’s not quite give up on America yet. The valuations favor international vs US presently. But good luck to places like Europe competing with America for the long term. See below what Europe faces when trying to compete with America over the long term, and trying to grow the next superstar companies. And that does not describe the enormous regulatory/energy cost challenges Europe faces compared to US. Simply, the entrepreneurial climate in America has no rival in the world.
In recent annual figures, the U.S. receives about 3 – 4 times more venture capital than Europe in absolute dollars.
Historical gap: Over the past decade, the cumulative difference is enormous — U.S. startups have attracted over $1.4 trillion more in VC funding than European firms from 2013–2022.
Per GDP or startup density: The U.S. also invests a significantly higher share of its GDP and per startup than Europe: ~0.7 % of U.S. GDP vs. ~0.2 % in Europe historically.
Vanguard’s capital market forecast model might sometimes be helpful in “tweaking” investments without losing diversification or making large risky bets. Last year it projected developed ex-USA markets would do well and the VEA ETF for this market is up 36% for the past year. The model projects US value markets and developed ex-US markets will outperform general US markets over the next 10 years—the confidence limits are broad, though.
https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-return-forecasts.html
40% of the profits of the S&P 500 are from outside the USA. And, those profits, in dollars, go up if the US dollar weakens”. Even “US” investments aren’t as US as people think.
Having at least some non-US holdings in your portfolio has been a perennial recommendation, although its been hard to love this idea until recently. However, staring a year ago, I began to add non-US holdings and have been rewarded for this effort. As always, however, when and how much are constant questions. I can’t say I’ll hang onto my non-US holdings forever, but unless or until the Dollar begins to show some strength, they seem like a good idea.
Keep these excellent articles coming. Thanks for sharing the discussion. Times change and people change, but it is my belief, the world will go up and down as the US also goes up and down, and they will not be in sync. I chose to go LONG, with the S&P 500, and I will keep holding LONG the Mag 7. All stocks stumble, and times keep changing, look at any stock chart. I do know one thing, since I have been born in 1946 the S&P 500 continues to go up, but of course not without UP’s and Down’s. At the end of the day, it is up and I do not expect that to change any time soon.
Instead of the wrongheaded “Sell America” slogan how about “Embrace Diversity”? That’s certainly one of the key lessons Jonathan Clements always tried to drum into our heads over the years as he steadfastly stuck with global market cap weighing in equities while the U.S. went on a long-lasting tear.
I do think, however, that current macroeconomic and political trends mean that additional diversification in investments may be worth considering. One can, for example, diversify away from the U.S. Total Stock Market indexes (recently reclassified as un-diversified due to their dependence on a handful of mega-cap tech stocks for their returns) using international and/or small cap equities. But unprecedented deficit levels combined with active undermining of both the independence of the Federal Reserve and crucial government data reporting used for indexes like CPI do, together, arguably constitute “it really is different this time” challenges to the American exceptionalism we U.S. investors have always relied on (as shown by the historical home country bias in both stocks and bonds held by even the most globally-minded investors).
The huge tear that gold has been on for almost two years now is certainly a telling barometer of increasing levels of global lack of faith in U.S. Treasuries and the U.S. dollar. Not being a fan of that sort of speculative investment myself (especially at nearly $5000 an ounce) I find myself with renewed appreciation of Jonathan’s recommendations and choices for his own portfolio: market cap weighted global equities as appropriate for one’s need and ability to take risk and a “barbell” of short-term Treasuries (he used VTIP and VGSH), with either a TIPS ladder or annuities (he favored the latter) to provide an income floor starting around age 70. He wasn’t betting against the United States – he was betting on the best companies in the entire world innovating and producing value.
For those wanting to put things on autopilot (usually a wise idea – especially as we age!) maybe Vanguard’s often-pilloried all-in-one LifeStrategy funds are having their moment in the sun. Globally-diversified in both stocks and bonds, 60:40 U.S. to international across the board, automatically rebalanced, low-cost. And hey, their Target Retirement Income Fund (VTINX) even includes a meaningful slice (17%) of TIPS. Maybe “VTINX and chill” will be the risk-averse retiree’s motto going forward.
If you’re withdrawing from your portfolio, I’d think twice before using blended funds like the Vanguard LifeStrategy series. Here’s why: in a down market, you can’t selectively sell just the bond portion. This means you lose the flexibility and downside protection that a separate bond allocation normally provides.
Holding stocks and bonds separately does require more effort and discipline on your part. But it gives you much better control to protect yourself against sequence risk.
I’m not sure it’s much better. A balanced fund would be rebalancing and selling bonds to buy stocks in a down stock market. Don’t you want to keep your target asset allocation?
I shifted from VTI to VT a year ago. Not because I wanted to sell America, just because that the rest of the world had more reasonable valuations in comparison. I love VT for more global diversity, as well as still holding a robust amount of the US market.
It’s rarely been a good idea to bet against America, especially in recent years, due to our ability to innovate, our rule of law, and lack of capital constraints. 🇺🇸 That said, I think a continuing and growing trend will be other governments buying fewer Treasury securities to hold as reserve assets as they diversify into gold. For instance our ally, Poland, is a huge buyer of gold. There are numerous reasons for this with the result being less demand for our Treasuries when we need to roll over about $9 trillion this year alone. Michael Howell, of Cross Border Capital, follows global liquidity very closely. He’s stated that 75% of all debt in the world sold each year is used to refinance existing debt, with the remaining 25% used for new investment. Those are staggering numbers.
Warren Buffett: “Never bet against America.“
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Great article. I have been investing in non-US equities for decades. Today more than half the worldwide market capitalization is outside the US. Why limit yourself when there are so many great companies around the world?
VT – total world market fund is 62% US.
Doug, thanks for the comment. I looked around the internet and found a wide variety of opinions on the total percentage of global equity percentages by country. I will go with VT as you suggest but I guess it’s a moving target.
VT is my core equity holding. The foreign stock ownership “moving target” is exactly what I want. Morningstar currently rates VT in it’s highest gold level and describes the fund as follows –
This fund tracks the FTSE Global All Cap Index, which includes stocks of all sizes across developed and emerging markets. Its market-cap-weighted approach naturally reduces turnover and trading costs, while semiannual reconstitution enables it to accurately portray the global market throughout the year.
However, it does go to show that American investor tendency to overweight US (home bias) investments is not the answer(I’m guilty too). I’ve slowly tilted to closer to a world market value balance.
Nice article, Adam. A couple of years ago, the advice was, “only buy America”. I followed Jonathan’s lead and kept my global diversification. I’ll do the same this year, for the reasons you cite.
Adam, great article. I guess, to some extent, I’ve recently “sold America.” Although, it wasn’t because of any anti-US sentiment or large-scale geopolitical considerations; rather, it was a personal realization that I wasn’t comfortable with, nor did I need, the potential outperformance and returns associated with the concentration risk of the US tech sector. Sometimes choices are driven by more mundane factors than the high drama of world events.