Missed the Big 2025 Stock Market Rally? It’s Not Too Late to Invest Internationally
Ohana Magazine – In 2025, international stock markets had a strong performance, outperforming the U.S. market. Many investors feel they missed out on big opportunities. However, experts suggest it’s not too late to start investing in international equities. Factors like the weakening U.S. dollar, geopolitical events, and growing concerns about U.S. market concentration are now creating favorable conditions for global markets in 2026.
Why International Equities Outperformed the U.S. in 2025
International markets outperformed U.S. equities in 2025, driven by several factors. The weakening U.S. dollar made foreign investments more appealing to dollar-based investors. Additionally, geopolitical events and the dominance of U.S. technology stocks in recent years have caused imbalances, allowing overseas stocks to take the lead. This trend signals an opportunity for U.S. investors to diversify their portfolios and consider international options for better growth.
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Geopolitical Shifts Influencing Global Markets
Geopolitics is playing a larger role in the markets in 2026. Countries like China, Russia, and Latin American nations are becoming more influential, reshaping global trade dynamics. With rising commodity demands and shifting political environments, these regions are creating new opportunities for investors. Experts believe the geopolitical changes will continue to fuel the demand for international equities in the coming years.
Rising Potential of Emerging Markets
Emerging markets are gaining significant attention as they show strong growth potential. Countries like Brazil, Chile, and Peru have seen notable increases due to the demand for commodities like gold and copper. For instance, the iShares MSCI Brazil ETF (EWZ) rose by 49%, while the iShares MSCI Peru ETF (EPU) surged 118% over the past year. These markets are thriving, driven by both global commodity trends and local political shifts, making them an attractive investment for diversification.
Europe’s Market Momentum and Growth
European markets are also showing signs of revival. With lower interest rates, fiscal spending, and regulatory reforms, Europe is becoming more appealing to investors. European banking stocks, like those of Barclays and Santander, are benefiting from central bank policies, making them solid picks for dividend-seeking investors. This shift marks a chance for U.S. investors to look beyond domestic markets and explore Europe for growth.
The Technology Sector Outside the U.S.
While the U.S. leads in technology, other countries are emerging as key players in the tech sector. South Korea, home to major memory chip manufacturers like Samsung and SK Hynix, is seeing remarkable growth. The iShares MSCI South Korea ETF (EWY) has risen by 125% over the last year. Investors can also find opportunities in companies like Taiwan Semiconductor (TSMC) and other data centers outside the U.S., showing that tech growth is now global.
Impact of the Weakening U.S. Dollar on International Investments
The weakening U.S. dollar has provided a tailwind for international equities. As the dollar weakens, foreign investments become more valuable for U.S. investors. This currency shift has helped boost returns from overseas markets, making them more appealing for diversification. As global capital and trade increasingly move in multiple directions, international stocks offer a unique opportunity for growth and stability in a diversifying portfolio.
