While in 2018 US stocks have well outpaced international stocks, that is not always the case. Just last year international stocks outpaced US stocks by 6.4% and so far in the fourth quarter emerging markets have topped the US by 1.8%.
After rising back above 3% in September, the 10-Year Treasury yield has now climbed to 3.20% in early October reaching the highest level since July of 2011.
The bull market reached a record in August becoming the longest running US bull market in history. Stocks have risen more than 300% since early March 2009 without seeing a decline of 20%. The stretch surpasses the previous longest ever bull market that ended in March 2000 with the technology bubble.
As part of the RWM investment strategy we seek to tilt the equity allocation of a portfolio towards value stocks. These are stocks that have low relative prices vs. their profits compared to growth stocks which have high relative prices vs. their profits. However, in recent years value stocks have trailed growth stocks. Is the recent under-performance by value stocks normal, and should we expect growth to continue to outperform?