I went to my first Hershey Bears hockey game with my grandparents when I was five years old. Since then, I have loved the game of ice hockey. I know we ice hockey fans are a bit of a distinct breed. In fact, I have spent considerable time pondering what captivates me about the game of ice hockey. While I enjoy the speed and flow of the game, I have concluded that my love for the game is rooted in the power of anticipation. I never know when or how someone might score a goal, so I need to stay in my seat and watch every minute intently to avoid missing any game-defining action.
You may be asking, what does the game of ice hockey have to do with investing and more specifically, global investing? At Master’s, we believe one of the fundamental principles of investing is that you need to “stay in your seat.” Just like leaving your seat to go to the restroom or concession stand during an ice hockey game lowers your probability of seeing each scored goal, getting in and out of the stock market lowers your probability of receiving the entire upside of the market.
As you can see from the following chart, the outperformance of the US stock market compared to the international stock market comes in unpredictable cycles. We recently (2008 – 2021) experienced an extremely long sustained period of US stocks outperforming international stocks. This fact could cause some of you to ask whether allocating any of your investment portfolios to international stocks still makes sense.
During the extended cycle of US stock outperformance, the team at Master’s continued to make a prudent allocation to international stocks. Again, following the principle that staying in “our seat” with global investing would give us the greatest probability of receiving the full upside of the global stock market.
As you look carefully at the chart, you can see that international stocks have outperformed the US stock market for more than a year. Is that the start of a new sustained international stock market outperformance trend? Of course, only time will tell, but you can rest assured that the team at Master’s will continue to allocate a prudent portion of the portfolios we manage to international stocks. We certainly do not want to miss any of the action!
We love to hear your stories. When have you gotten “antsy,” and it caused you to miss the action?