Are International Markets Worth Investing In for U.S. Investors?

By Neil Patel – Apr 27, 2026 at 11:30AM ESTKey PointsGiven the American economy’s dominance, it’s hard to make a case for betting against the U.S.The S&P 500 index’s monster rise in the past decade has driven investor fears about the market’s current valuation. It makes sense to allocate 5% of a portfolio to the Vanguard Total International Stock ETF. It might go without saying that investing in the stock market can lead to long-term wealth creation. An important strategy to ensure lasting success, which might sometimes be overlooked, is to build a diversified portfolio. Of course, this involves picking businesses that operate in different industries, sell different products, and cater to different end customers. However, diversification from a geographical perspective is also something to consider. Is it time for U.S. investors to seriously consider allocating capital to international markets? Here's the bear and bull case for this strategy. Image source: Getty Images. It has been a bad idea to bet against the U.S. Warren Buffett, who compounded Berkshire Hathaway's share price at an exceptional annualized rate of nearly 20% for six decades, understands where the most promising opportunities lie. "Never bet against America," the Oracle of Omaha wrote in the 2021 shareholder letter. The U.S. has the biggest economy in the world, a culture of entrepreneurship and ingenuity, strong property rights, and robust capital markets to facilitate ongoing growth. These factors feed on themselves to create a positive feedback loop, supporting sustainable progress in the future. For investors, owning the S&P 500 index has been a fantastic move, as the benchmark has generated a total return of 305% in the past decade (as of April 23). These gains have been driven by the "Magnificent Seven" stocks, which have become some of the most dominant companies we've ever seen. From a societal perspective, they're also historically significant, given that their products and services impact technological trends on a global level. It's also difficult not to come away impressed by the powerful position America has in other areas, like financial services, defense, energy, entertainment, and pharmaceuticals. ExpandNASDAQ: VXUSVanguard Total International Stock ETFToday's Change(-0.19%) $-0.15Current Price$82.33Key Data PointsDay's Range$82.26 - $82.7452wk Range$63.23 - $84.48Volume2.6M Geographic diversification makes sense in the current environment One of the main reasons to consider international exposure is the U.S. stock market's valuation, as the S&P 500 index has only been more expensive during the dot-com period. This doesn't mean that poor returns are a foregone conclusion. But it might suggest that performance in the future won't resemble what was achieved in the past. And with rising geopolitical tension, aggressive U.S. trade tactics, massive federal debt, and countries wanting to keep artificial intelligence progress within their own borders, maybe America won't be the main attraction for capital as it has been historically. This makes me believe that it's smart for U.S. investors to allocate 5% of their portfolios, still a relatively small share, to the Vanguard Total International Stock ETF (VXUS 0.19%). At a low expense ratio of 0.05%, this investment vehicle provides exposure to leading foreign companies, like Taiwan Semiconductor Manufacturing, Samsung Electronics and ASML Holding, which are the three top holdings. This ETF offers a way for investors to diversify from a geographical perspective.Read NextApr 24, 2026 •By John BallardVXUS vs. IEMG: Which International ETF Is the Better Buy?Apr 23, 2026 •By Andy GouldIXUS vs. VXUS: Which International ETF Is the Better Buy for Global Diversification?Apr 23, 2026 •By Dave KovaleskiIs VXUS the Smartest Way to Own the Entire World Outside the U.S.?Apr 23, 2026 •By David DierkingI Put the Majority of My Portfolio Into 2 Vanguard ETFs 3 Years Ago.

Here Is What Happened.Apr 23, 2026 •By Stefon WaltersThe Most Misunderstood Vanguard ETF That Smart Investors Should ConsiderApr 22, 2026 •By Seena HassounaChoosing Between VXUS and IEFA Comes Down to One QuestionAbout the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelStocks MentionedVanguard Total International Stock ETFNASDAQ: VXUS$82.38(-0.13%)-$0.11*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.