I haven’t invested in a US stock since I bought AIG more than a year ago, at least if we exclude ALJJ which was mostly a merger arbitrage play. It’s not a conscious decision, but I simply didn’t find a whole lot of US stocks that screamed value to me. Recently a lot of names in Singapore and Hong Kong came to my attention, and when I look at the return of the various indexes for the past year that doesn’t seem to be a coincidence:
The GMO 7-Year asset class forecast is in my opinion a good sanity check for overall valuation levels. The expectations for emerging markets are a lot better than those for the developed world, although this graph doesn’t account for possible different risk levels.
The expected average negative real return in the US certainly doesn’t mean that I don’t want to invest there: I believe that there is always a bargain somewhere. The odds of finding one are going down though, and I think that correlates with my experience so far this year. Fishing is easier when there are more fish in the pond.