The financial markets that we get to play in these days have already been sliced, diced, and organized to death. And that’s a good thing! Once upon a time, the global markets were a hodgepodge of countless companies. Now, they’ve been cataloged into easy-to-follow groups. One way to break things down is geographically like U.S. and Foreign (aka International). Sometimes the foreign category is called ex-U.S. because it includes all the companies that are domiciled outside the United States. We could further divide the international section into developed and emerging to differentiate between the more advanced nations (i.e., Japan, Germany, England, etc…) and the emerging ones (i.e., Brazil, Russia, India, China).

You can track the behavior of any category you want using ETFs. For the U.S. I suggest using the S&P 500 (SPY). For foreign developed try EFA or VEA. For emerging markets use EEM. Conventional, passive investors looking for diversification usually invest in every single category with a certain percentage of their assets.

Traders cut from the tactical cloth look to shift their exposure based on which area they think will do best moving forward. In fact, there’s an entire cottage industry designed around analyzing the performance of one group versus the other. Ever since the stock market bottomed in early-2009, U.S. stocks have beaten their foreign counterparts handily. For proof, compare the chart of SPY to that of EFA and EEM. American equities have dominated.

But history suggests that it hasn’t always been so. Indeed, the performance pendulum always swings back to favor foreign stocks, at least for a spurt. Consider the following graphic, for instance. The black area illustrates the duration and magnitude of U.S. outperformance, and the gold (green?) area reflects when foreign stocks have led the charge.

As you can see, the reign of U.S. stocks is getting long in the tooth. Couple that with the recent breakout over long-term resistance levels for EEM and EFA, not to mention the emergence of commodity and global-growth industries as big winners, and one starts to wonder if it isn’t time for foreign equities to take up the torch.

The implications are myriad, but one takeaway for any novices is that it pays to have a watchlist that is as broad as it is deep. Obsessing over U.S. stocks while ignoring their overseas counterparts hasn’t much mattered due to the domination of America’s performance. But someday soon those who aren’t in the habit of tracking the likes of EEM, EFA, and ilk, may regret the narrowness of their focus.