9 Minute Read

Tackle Today: Foreign Developed Markets

June 10, 2021

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Overseas stocks are waking up

Traders,

As you gain trading experience and get more comfortable with U.S. equities and the giant Indexes that accompany them, you’ll eventually begin looking abroad. The Rest of the World (ROW) offers diversification and more opportunity for trade ideas.

In organizing markets outside the U.S., Wall Street uses two main categories: Foreign Developed and Emerging Markets. The first one includes countries like Germany, England, and Japan. Their economies more closely mirror the U.S. The second focuses on the so-called BRIC countries: Brazil, Russia, India, and China. They have more potential for growth, but also carry more risk.

What caught my eye and is the reason for today’s focus on companies domiciled outside America, is the breakout in international stocks.

There are many ETFs that track the category but for today’s chart, I’m using the Vanguard Developed Market ETF (VEA). Foreign stocks have seriously lagged their American counterparts over the past decade. But they’re starting to get their act together. With this month’s push, VEA has finally eclipsed its 2007 peak.

Here’s to hoping this signals a renewed bull market or at least some much-needed catch-up that allows foreign stocks to finally start pulling their weight.   

#TeamTackle


Chart of the Day

New Record Highs for VEA

Foreign developed stocks have finally taken out their 2007 peak. It only took 14 years, but who’s counting?! The new highs are simply the latest in a string of milestones for the stock market. It could be a good omen for international equities moving forward.


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