Domestic stock indexes had a wild ride in the first quarter. After a rough January, ebullient February and punishing March, the S&P 500 and the Dow had nothing to show for it but a tiny gain. Considering the uncertainty on the economic and interest rate front, these volatile conditions are likely to continue.
A less obvious place to hide from the storm may be international stocks. Focusing on areas where economic growth is muted may seem like a strange strategy, but it is in those areas that economic stimulus measures will be the boldest. That means that Japan, a country grappling with deflation, and Europe, which struggles with everything related to capitalism, look attractive.
I've discussed the valuations difference between domestic and foreign stocks in previous posts.
