25 Feb Chart of the Month – February 2025
In this month’s Charts of the Month, Nick Ryder, CFA, examines the key drivers behind the U.S. market’s exceptional outperformance since 2010 and assesses whether this trend can continue in the years ahead.
As most of our readers are likely aware, we are in the midst of a decade-plus stretch of extraordinary U.S. equity outperformance relative to non-U.S. stocks.
- From the beginning of 2010 through the end of last year $1 invested in U.S. stocks grew to more than $7 as U.S. stocks gained nearly 14% per year along the way, well above the market’s roughly 10% per year average gain over the last century.
- Meanwhile that same $1 invested in foreign developed markets stocks grew to a bit more than $2 as foreign stocks gained slightly more than 6% per year along the way. A still healthy gain in absolute terms but a far cry from the exceptional performance delivered by U.S. stocks.
As a result of this remarkable stretch of outperformance, many investors have come to embrace the notion of “American Exceptionalism” and are questioning the wisdom of global equity diversification.