Which Markets Will Perform Best

Here’s an important question concerning our future… “will the US stock market continue to outperform the rest of the world over the next ten years?”

No one has an answer to this question, but a comparison of developed country stock markets versus emerging country stock markets might help us have a better feel for what might happen.

More importantly this comparison can provide a path of action we can follow into the chaos we face.

The comparison has to do with subtle distortions in price and value in overseas stock markets.


Developed good value markets have been rising in value and currently sell at 1.08 times book. They offer an average dividend yield 3.27%.  Emerging good value markets have a price to book of 1.15 and pay an average dividend yield of 3.52%.

Developed 1.08 vs. Emerging 1.15 – Price-to-Book

Developed 3.27%    Emerging 3.52% Average – Dividend Yield

These differences are not great, but this flip flop is worth noting because traditionally emerging markets sell for a lower price-to-book but pay a far lower dividend than developed markets.

Why have these traditions reversed?

One reason for the developed versus emerging value flip could be that US indices have skyrocketed higher than other European and Asian markets since 2010. Thus US sares are sucking up a greater portion of the developed market sector investments.

The chart below shows the Dow Jones Industrial Index’s rise over the past decade versus the MSCI EAFE (EuropeAfricaFarEast).


Since the US market is a poor value market and many developed European and Asian markets are good value markets, the overweighting of US shares creates an European-Asian value buildup as it keeps the price of European and Asian stock prices down in terms of comparison.

If this theory has any connection to reality, then every month, the top value developed markets have become a better deal.

When investing, I always look for contrasts, distortions and trends.

The surge of emerging market prices and rise in developed market values is a distortion.

Let’s look back since last year.

In November 2019 the Developed Markets Top Value Model Portfolio we track in our Purposeful Investing Course (Pi) was undervalued by 36% compared to the MSCI World (Standard) Index.

The Emerging Markets Equities were undervalued by 27% compared to the MSCI World Index .

By March 2020 the Developed Markets Top Value Model Portfolio was undervalued by 40% and the Emerging Markets Top Value Model Portfolio was undervalued by 22% compared to the MSCI World Index.

By April the developed Markets were undervalued by 44% emerging markets by 20% compared with the MSCI World Index.

Now in June 2020 the Developed Markets Top Value Model Portfolio is undervalued by 43% Emerging Markets Equities undervalued by 27% compared to the MSCI World Index.

The June figures could be the beginning of a trend reversal that would help push good value developed market share prices up.

The timeline are too short and numbers too limited to prove any positive trend, but they suggest that we should watch these figures closely. If they are the beginning of a trend then value markets will outperform the US market and developed markets should outperform the most.


Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.


The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to invest in each of the good value markets.

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

There is an iShares country ETF for almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.


Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy, diversified investing.

If you are not totally happy, simply let me know in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.