Why Every U.S. Investor Needs Global Exposure in 2026
Welcome to Global Invest Note — a place for investors who think beyond borders.
Most American investors hold a portfolio that’s almost entirely U.S. stocks. It feels safe. It feels familiar. And for the last 15 years, it has worked beautifully — the S&P 500 has crushed nearly every other major market.
But here’s a question worth asking: will the next 15 years look like the last 15?
History suggests probably not. In fact, you don’t have to look further than 2025 to see why. While most U.S. investors stayed glued to the S&P 500, South Korea was the top performer in emerging markets equities in 2025, generating a 70.9% return in U.S. dollar terms — a year that quietly reminded the world that markets outside the U.S. still matter. A lot. Matthewsasia
This is the first post on Global Invest Note, and it captures the philosophy behind everything we’ll publish here: smart investing is global investing.
The Home Bias Problem
Investors everywhere tend to overweight their own country’s stocks — a behavior economists call “home bias.” Americans hold roughly 85% of their equity portfolios in U.S. stocks, even though the U.S. represents only about 60% of global market capitalization.
There’s a comfort in familiarity. You know the brands. You watch the news. Your 401(k) defaults often push you there. But familiarity isn’t the same as diversification.
What History Actually Tells Us
The U.S. has been the world’s best-performing major market since around 2010. Before that? Different story.
- 2000–2009 (“the lost decade”): S&P 500 returned roughly 0% annualized. Emerging markets returned over 10% per year.
- 1980s: Japanese stocks dominated, briefly making Tokyo’s market larger than the entire U.S. market.
- 1970s: International stocks outperformed U.S. stocks significantly.
Market leadership rotates. The country that wins the next decade is rarely the one that won the last.
Spotlight: South Korea — The Market Most Americans Missed
If 2025 had a sleeper hit in global markets, it was Korea.
After more than a decade of being labeled “cheap for a reason” — a phenomenon known as the “Korea Discount” — the KOSPI exploded higher. As of May 2026, the benchmark KOSPI is trading near record highs around 7,490, riding a wave that has reshaped how global investors view the country. TRADING ECONOMICS
Three forces are driving the move:
1. The AI and Semiconductor Boom Korea is home to two of the most important companies in the global AI supply chain: Samsung Electronics and SK Hynix. Samsung Electronics and SK Hynix together account for roughly 52% of total net profits in the KOSPI/KOSDAQ universe, and the demand for high-bandwidth memory chips that power AI data centers continues to surge. Yahoo Finance
2. The Corporate Value-Up Program For years, Korean companies traded below book value because of weak shareholder returns and complex family-conglomerate ownership structures. The government’s Corporate Value-Up Program — modeled on Japan’s successful reforms — is now pushing companies to improve dividends, buybacks, and governance. With President Lee Jae Myung backing the initiative, momentum has accelerated.
3. Industrial Renaissance Beyond Tech Korean shipbuilding, defense, and power-equipment companies are benefiting from global geopolitical shifts and the energy transition. This isn’t just an AI story — it’s an industrial story too.
For U.S. investors with zero international exposure, 2025 was a year of watching one of the largest equity rallies in the world happen on someone else’s screen.
Three Reasons Global Diversification Matters Now
1. Valuation gaps are historically wide. U.S. stocks currently trade at significantly higher price-to-earnings ratios than European, Japanese, and emerging market stocks. Higher valuations historically correlate with lower future returns.
2. The dollar cycle could turn. The U.S. dollar has been strong for over a decade. When the dollar weakens, international holdings (denominated in foreign currencies) get an automatic boost in dollar terms.
3. True diversification reduces risk. A portfolio split across regions tends to have smoother returns. Different economies face different shocks at different times.
The Simplest Way to Go Global: Low-Cost ETFs
You don’t need to pick foreign stocks one by one. A handful of low-cost ETFs can give you broad global exposure for almost nothing in fees.
| ETF | Region | Expense Ratio |
|---|---|---|
| VXUS | Total International (ex-U.S.) | 0.07% |
| VEA | Developed Markets | 0.05% |
| VWO | Emerging Markets | 0.08% |
| VT | Global Total Market | 0.07% |
| EWY | South Korea | 0.59% |
| FLKR | South Korea (low-cost alternative) | 0.09% |
A common starting allocation:
- 60–70% U.S. stocks (VTI or VOO)
- 30–40% international stocks (VXUS)
That alone puts you ahead of the average American investor in terms of diversification.
If you want a tilt toward a specific country like Korea, you can add a single-country ETF on top — but keep it as a satellite position (typically 5–10% of your portfolio), not a core holding.
A Quick Note on Korea-Specific ETFs
If you’re considering direct Korea exposure, FLKR is worth a look. EWY has a 0.59% expense ratio, which is significantly higher than FLKR’s 0.09% expense ratio, while tracking very similar baskets of large Korean companies. Over a long holding period, that fee gap compounds into real money. PortfoliosLab
What to Expect From Global Invest Note
Going forward, you’ll find posts here on:
- Global market analysis and country-specific opportunities (Korea, Japan, India, Europe, and beyond)
- ETF deep-dives across regions and sectors
- Currency, macro, and central bank trends that affect your portfolio
- Long-term strategies for building wealth across borders
- Honest, jargon-free explanations of how global markets actually work
We’re not here to chase the next hot stock. We’re here to help you think clearly about money in a connected world.
If that resonates, you’re in the right place. Bookmark the site, and let’s build something useful together.
Disclaimer: Global Invest Note publishes educational content for informational purposes only. Nothing here constitutes financial advice. Always consult a licensed financial advisor before making investment decisions.