International stocks have been on a hot streak this year, nearly doubling the return of their U.S. peers. With such a tempting return — about 14 percent for the first five months — is now the time to stock up on international equities?
Before answering this question, let’s first consider past performance. This chart shows international stocks were on fire from 2003 to 2007, but have been laggard in the past few years through the end of 2016. Since many now believe international stock valuations are more attractive than the U.S. equities, could this be the beginning of a period when international stocks outshine U.S. stocks?