The reasons why investors should stay away from market mania

Because of today's excessive attention to US markets, investors are left wondering about opportunities and risks in other places

When markets started to sway earlier this year, I hoped that attention would start to move slightly away from US stocks. My dedication to America isn't the reason for this. Indeed, the amount of expensive-looking US stocks that will now make up a typical global portfolio at a time when domestic politics are obviously becoming less conducive to business makes me uneasy. But that is more about risk management than a definitive belief that the tech boom is still ongoing.

The amount of commentary that centers on the US market, US economy, and US politicsin other words, anything that is wrapped in the stars and stripeshas become obsessive, which is what I'm worried about. Markets are far too ignorant of what is going on in other places. Consider the entire UK stock market, which is collapsing due in part to the small- and mid-cap segment receiving so little attention that it is no longer functional. Numerous take-private agreements at significant premiums to the undisturbed price attest to that.

When BFIA was first established 25 years ago, a variety of industries, nations, and assets were covered in weekly industry and media analysis and commentary. Following the financial crisis, coverage started to wane, and it got worse as capital was drawn away by the tech boom and the strong dollar. Many places are now neglected for extended periods of time.

Emerging markets are once again attracting the attention of investors.

Examine developing markets. I wrote about this change not too long ago, but it's worth mentioning again. The MSCI Emerging Markets index is up 16 percent in sterling terms in the first nine months after stagnating for a long time. The US is up 6 percent and developed markets are up 8 percent. That only scratches the surface of the changes, though, as China has recovered 29% and India, the primary bright spot of the last ten years, is down 8% in the EM universe. Korea is 44 percent higher. Latin America and emerging Europe are both thriving. It is impossible to claim that significant political or economic changes have occurred in the majority of these nations to support their position. As flows into the US slow down, it is concluded that many are just getting noticed again.

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The broader message here is not about emerging markets, but rather about the benefits of holding a portion of your portfolio in reasonably priced assets, even when they are underperforming. We don't have to be concerned about comparing our performance to a benchmark because we are private investors. We do not intend to place all of our bets on the best-performing stocks in order to earn a performance fee. Our goals are to reduce the possibility of suffering catastrophic losses and increase the likelihood of obtaining a healthy return. One aspect of this is keeping an eye on assets that aren't in favor.

Finally, these will be the themes of our annual BFIA Wealth Summit and the celebration of BFIA's 25th birthday on November 7 in London. Turmoil, tariffs, and Trump 2.0 is the name of the phenomenon. Yes, there will be an AI session. To adapt to a world that is largely outside of America, our speakers will examine opportunities for growth, value, and wealth preservation.