Foreigners Are Buying, Not Selling, US Securities

Foreign stocks have been outperforming US stocks since early last year. Contributing to this outperformance has been the weakening dollar over this period (chart). That's fueled lots of chatter about the so-called "Sell America Trade" and dedollarization. That's a bit ironic considering that during 2024 the chatter was about "American Exceptionalism."

We aren't giving up on the dollar even though we did recommend underweighting US stocks and overweighting overseas stocks on December 7, 2025. We did so because the US MSCI market-cap share rose to a record 65% early last year. We figured that might be a peak for the US. Investors had fully discounted American Exceptionalism, and it made sense that their focus would turn to the exceptionally low valuations carried by the stocks of many exceptional foreign companies.