Most people my age, fresh out of college or getting their first big-kid job, hear 'investing' and think 'S&P 500'. And for good reason, right? It's done incredibly well. But what if I told you there was a time, not that long ago, when international markets absolutely crushed the US? It sounds counterintuitive, especially with all the hype around US tech stocks, but the data doesn't lie. And understanding this isn't just trivia; it's crucial for how you build wealth.
The Myth: US Stocks Always Win (and why that's recency bias)
You see the headlines. You hear the chatter. US stocks, specifically the S&P 500, feel like the default winning bet. And if you've only been paying attention for the last decade, you'd be totally justified in thinking that. But that's exactly where 'recency bias' bites us.
Go back to the early 2000s. From September 2001 to October 2007, your $10,000 initial investment in international stocks would have grown by a whopping 150.5%. Meanwhile, a similar investment in the US market would have only managed a 65.7% gain. Think about that for a second. International more than doubled the US market's returns in that period. If you were investing then, everyone would have been telling you to go global.
This isn't ancient history; it was happening when we were kids. My point is, the idea that the US market is some kind of perpetual, unchallenged champion is simply not true when you look back a little further. Leadership rotates, and sometimes it rotates hard.
The Reality: US Did Win (over the full period... this time)
Okay, so international markets had their moment in the sun. But let's be real: for those of us who started investing more recently, it's been the US market on an absolute tear. And the data backs that up, too.
Fast forward to 2010. From January 2010 to July 2026, the script flipped dramatically. The US market delivered an incredible 842.1% return. International markets, while still growing, lagged significantly with a 223.0% return over that same period. That's a huge difference, and it's why so many people today are convinced the US is the only place to be.
Now, let's look at the full picture. If we consider the entire 24.9-year period, from September 2001 to July 2026, that initial $10,000 investment would have ended up quite differently: $114,088 in the US market, versus $53,796 in international markets. That's a compound annual growth rate (CAGR) of 10.3% for the US, compared to 7.0% for international. So, yes, over this entire span, the US absolutely won.
What This Means For Your Bank Account
So, we've got one period where international dominated, and another (longer) period where the US crushed it, ultimately leading to the US winning over the full 24.9 years. What's the takeaway here if you're just starting out with, say, $500 or $5,000 to invest?
Key Insight: Nobody knows who will win next. Diversification isn't about predicting the future; it's about insuring against being wrong.
My tech-bro coworkers, bless their hearts, were always convinced they knew the next big thing. But real life (and real data) shows us that market leadership is a fickle beast. If you'd put all your money into international stocks in 2001, you'd have looked like a genius for a while. If you did the same in 2010, you'd have missed out big time.
This is why diversification isn't a sexy strategy, but it's arguably the most important one. It's not about trying to pick the winner; it's about making sure you don't miss out, no matter which market performs best.
Consider this: If you had split your initial $10,000 investment, say 60% US and 40% international, your money would have grown to $89,971 over that full 24.9-year period. It's not the $114,088 you would have gotten with 100% US, but it's also not the $53,796 from 100% international. It's a solid, diversified middle ground that protects you no matter which market leads. For those of us building wealth with consistent, smaller contributions, that kind of reliable growth, without the headache of trying to predict the future, is golden.
Don't fall for the hype. Don't chase yesterday's winner. Invest in both the US and international markets, because honestly, who knows which one will be doing the heavy lifting for your bank account in the next 5, 10, or 20 years?