Enterprising Investor
Practical analysis for investment professionals
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European versus US Equities 1980-2017

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Subjects: Performance
chart

This chart plots the rolling 10-year performance difference between European and US equities. The blue line indicates when European equities have outperformed over the previous 10 years, while the red line shows when US stocks have come out ahead. The green line highlights when US equities outpaced their European counterparts to the extremes that they have today.

In the 44 previous readings when the spreads reached 100%, European stocks went on to outperform for the subsequent 10 years.

Now to be fair, past performance is irrelevant, and when N=2, well, yeah.

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About the Author(s)
Michael Batnick, CFA

As Director of Research at Ritholtz Wealth Management, Michael Batnick, CFA, reads research publications and is in charge of the company’s internal research efforts. Batnick is a member of the investment committee, and spends most of his time developing and implementing risk management and portfolio strategies for the firm’s clients. Batnick writes at The Irrelevant Investor blog, where he aims to educate people about investing.