For years, U.S.-based investors ignored international markets and the argument for geographic diversification in stocks, and they paid no penalty for their provincial approach. Booming large-cap U.S. stocks trounced their overseas counterparts. But many investors woke up to the opportunity in foreign stocks in 2024 and 2025 as concerns about the valuation of the U.S. market relative to the world and its concentration in a narrow technology theme intensified. The trade was timed well, and it is still working, with large-cap international stocks continuing to beat the S&P 500 in 2026. Can the overseas bull market continue?

David Botset, head of strategy, innovation and stewardship at Schwab Asset Management, says there are no signs yet…