The S&P 500 has been the focus of equity investors since the 2008-09 financial crisis.
Right now, however, international stocks are seen as a better investment opportunity in the coming years.
Valuations, U.S. federal trade, and the global de-dollarization trade could all play a part.
For years, investors have focused their portfolios almost entirely on U.S. large-cap stocks. We've seen in the early part of 2026 that this won't always be the case.
Now, we're seeing small caps, value stocks, dividend payers, and other more defensive areas of the market having a moment. With several indicators suggesting that the U.S. economy is slowing, it's time to think about the longer-term investment case for these groups.
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International stocks carry a lot of intrigue. They've underperformed the S&P 500 (SNPINDEX: ^GSPC) consistently since the 2008-09 Great Recession up until last year. Both non-U.S. developed and emerging markets significantly outperformed U.S. stocks in 2025. And the trend is continuing this year.
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This could be the beginning of a multiyear run for international stocks. That's why the Vanguard FTSE Developed Markets ETF (NYSEMKT: VEA) is looking like an attractive buy.
Overall growth estimates for international developed markets aren't quite as high as they are for the United States. But the valuations are more compelling. This ETF has a price-to-earnings (P/E) ratio of 17 compared to a 26 multiple for the Vanguard S&P 500 ETF (NYSEMKT: VOO).
The larger bullish catalyst might be world de-dollarization. Many countries are shifting business and trade relationships away from the United States. The U.S. Treasury is approaching $40 trillion in federal debt, and $1 trillion-plus annual deficits are becoming the norm. That trend will continue to weaken the dollar and make international investments more attractive.
International investing may not be popular, but foreign equities represent a better opportunity for returns over the next several years.
Before you buy stock in Vanguard FTSE Developed Markets ETF, consider this:
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David Dierking has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard FTSE Developed Markets ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.