- Non-US market returns the first three quarters of 2022 were like the famous Marilyn Monroe/Albert Einstein optical illusion—what you see depends on where you’re standing.
- US investors, observing returns denominated in USD, have seen relatively poor returns for international markets and possibly view this as yet another strike against global diversification. But, expressed in local currency, it is the US market that brings up the rear in regional performance.
- People see what they are positioned to see. Up close, Einstein’s face seems obvious; US markets outperformed ex-US markets. But when you take a step back, Marilyn comes into focus, and local investors fared better in their home markets than did Americans. Perspective matters for illusions, and so too when considering an international allocation.
Active investors have long attempted to get an informational edge on markets by using artificial intelligence (AI) processes to retrieve and process data. For example,