The Advantage of Rebalancing into International Stocks

By its very nature, if you own a “diversified” portfolio, at least one asset class will always underperform others. That is what diversification is all about. With international stocks continuing to underperform domestic stocks, Wall Street Journal columnist Jason Zweig points out the wisdom of owning and rebalancing into this asset class, not only from a diversification standpoint, but from a future return standpoint as well, based on current valuations.

In the chart below, Vanguard displays the performance of both US and International stock returns in the last 45 years.

Int stocks