‘Buy America’ to ‘bye America’: Why investors are looking beyond US stocks
Times of India
by TOI BUSINESS DESKFebruary 22, 2026
AI-Generated Deep Dive Summary
US investors are increasingly shifting their portfolios away from domestic equities, with $75 billion withdrawn from US equity products over the past six months. This trend reflects a growing move away from the long-standing "buy America" strategy, driven by moderating returns in the tech sector and stronger performance in global markets. Despite a weaker dollar making overseas investments more expensive, investors are drawn to opportunities in emerging markets like South Korea and Brazil, as well as European and Asian equities.
The shift comes after years of US market dominance, fueled by technological innovation and economic growth following the 2009 financial crisis. However, concerns over AI-related risks and high valuations in megacap tech stocks have prompted investors to explore alternatives. Data shows a significant rotation from US equities into emerging markets, with $26 billion invested so far this year, while European and Asian markets have seen strong gains, outpacing the S&P 500's 14% increase over the past year.
Valuation gaps also play a role in this global repositioning. The S&P 500 currently trades at 21.8 times expected earnings, compared to 15 times in Europe and 13.5 times in China. Investors are increasingly favoring industrial and defensive sectors, which are more prominent in markets like Germany, the UK, and Japan. European banking stocks, for instance, surged 67% last year and have continued to rise in 2024, attracting renewed interest from US investors looking for cyclical growth opportunities.
This reallocation underscores a broader reassessment of global market dynamics, with US investors recognizing the potential for higher returns and diversification outside their domestic markets. The trend reflects a long-term shift in investment strategies, driven by both economic developments and policy changes, including the weaker dollar and stronger foreign market performance. As investors seek to balance risk and reward, this reallocation highlights the interconnectedness of global financial markets and the growing emphasis on international diversification.
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Originally published on Times of India on 2/22/2026