Analysts at and have a pessimistic outlook for the . With that in mind, investors might look at the as a better long-term bet right now. I can see the reasons for being wary of US stocks at the moment.
But I think there are opportunities on both sides of the Atlantic right now. US vs UK According to Goldman, the S&P 500 will return around 3% a year over the next 10 years. If that’s correct, investors who own the index will probably be disappointed a decade from now.
JP Morgan analysts also have a underwhelming view, expecting 5.7% a year. That’s a better result, but it’s still below over the last decade.
That might make it tempting to avoid the S&P 500 right now. But while I wouldn’t buy the index, I think staying away from US stocks entirely would be a mistake. Over the last 10 years, the S&P 500 has handily outperformed the FTSE 100.
Despite this, there have been some UK stocks that have delivered better returns than the US index. ‘s a good example (and it’s just one among several). After a 314% gain, investors who bought the stock in 2014 have done better than they would have by investing in the US index.
This shows that even in an underperforming index, there can be individual stocks that generate great returns. And that’s why I think avoiding US stocks entirely could be a missed opportunity. Which stocks should I buy? With a 10-year time horizon, I’m looking for shares that are out of fashion at the moment, but where the underlying business is resilient.
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