Overseas
stocks
are
significantly
undervalued
compared
to
the
U.S.
stock
market
and
present
an
opportunity
for
investors
in
2024,
according
to
Ritholtz’s
Josh
Brown.
The
Ritholtz
Wealth
Management
chief
executive
pointed
out
that
the
MSCI
All-Country
World
Index
ex-U.S.
is
currently
trading
at
a
34%
discount
relative
to
the
S
&
P
500
index
of
large
U.S.
stocks.
Over
the
past
20
years,
the
average
discount
has
been
16%,
Brown
added.
“I’m
telling
you,
overseas
developed
market
stocks
are
twice
as
cheap
as
they
have
been
over
the
last
two
decades,”
Brown
told
CNBC’s
“Closing
Bell”
on
Wednesday.
“There
were
some
huge
gains
in
different
markets
last
year
that
not
a
lot
of
people
were
predicting.”
Investors
can
access
the
index,
which
tracks
stocks
in
22
developed
and
24
emerging
markets,
through
the
iShares
MSCI
ACWI
ex-U.S.
ETF
.
The
fund
had
a
total
return
of
20%
in
2023,
compared
to
26%
for
the
S
&
P
500.
The
MSCI
index
is
currently
priced
at
12.8
times
earnings,
compared
to
the
S
&
P
500’s
20
times,
according
to
Morningstar
data.
ACWX
1Y
line
Brown
acknowledged
concerns
about
lower
growth
rates
and
geopolitical
issues
abroad,
which
is
a
factor
behind
the
lower
valuation
multiple
compared
to
U.S.
markets.
“Yes,
there
are
some
good
reasons.
Yes,
geopolitics.
I’ll
take
all
of
that,”
he
said.
Yet
Brown,
who
co-founded
Ritholtz
in
2011,
believes
overseas
stocks
could
still
outperform
if
central
banks
cut
interest
rates.
“I’ll
still
tell
you
that
if
we’re
going
into
a
rate-cutting
cycle,
even
if
it’s
a
modest
one,
these
stocks
can
work
and
you’re
taking
less
risk
because
[their]
starting
valuation
is
not
just
a
little
bit
cheaper,
it’s
a
multi-decade
level
of
discount
that
you’re
getting,”
Brown
stated.
He
said
investors
could
target
high-quality
companies
in
developed
countries
like
Japan
and
Europe.
“You
don’t
have
to
buy
low
quality,”
Brown
added.
“You
could
buy
overseas
high
quality
in
Japan,
Europe
and
you
could
win.”
In
Brown’s
view,
there
was
“no
reason”
to
believe
investment
in
non-U.S.
stocks
won’t
perform
in
2024
as
well
as
they
did
in
2023.
