U.S. stocks have consistently outperformed their international peers over the past three decades, but AQR Capital Management cofounder and chief investment officer Cliff Asness believes the streak may be coming to an end.
“Looking back, U.S. outperformance since 1990 can largely be explained by relative richening against other equity markets,” the billionaire investor wrote in an article for The Journal of Portfolio Management released April 28, describing how American stocks have become increasingly expensive compared with international counterparts. “Investors betting on continued U.S. outperformance may be making a perilous assumption that this richening will continue, despite historically high relative valuations suggesting the opposite is more likely.”
