The Standard & Poor’s 500 Index (S&P) is on a tear. A careful analysis of a couple of the economic factors that have supported recent U.S. outperformance provides a reasonable argument that long-term investors might do well to consider rebalancing portfolios to be less dominated by leading U.S. index holdings:
- Earnings at U.S. companies have been supported by recent reductions in regulation and tax cuts.
- “America first” policies, including the redesigning of trade agreements and a new tariff regime, have created
apparent wins for the United States. The damage that has been created, however, will likely come back to
impact our economic outlook.