How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn

by Allan S. Roth

percent return, but international stocks returned 187 percent. The very fact that the returns differentials could be this large between U.S. and international stocks shows that you don’t get enough international exposure by just buying U.S. stocks. Faulty argument #2: One should overweight international stocks, because most of the world’s economic growth will come from overseas. I certainly agree with this argument, but that does not translate into international stocks outpacing U.S. stocks. That’s because it’s not exactly a secret that countries like China and India are growing faster than the United States, and this knowledge is already priced into the market. This is the same phenomenon as Google being priced at much higher multiples than Ford, because we know Google has better economic prospects. Remember that beaten-up value stocks tend to make better investments than the star growth stocks. The same may be true in that the fastest-growing