Here's where to find real stock-market bargains now. You just have to be willing to travel.

According to Mark Hulbert, undervalued international stock markets, like Poland's, are outperforming overvalued U.S. markets this year, reversing a long-term trend. Hulbert suggests U.S.-centric investors should diversify into these markets, highlighting Poland's low CAPE ratio of 9.22 as an attractive valuation.

Analysis

Mark Hulbert highlights a significant market reversal this year, where undervalued international stock markets are outperforming previously favored, overvalued U.S. markets. Despite advice to diversify, U.S.-centric investors have shown reluctance to explore these global opportunities. Poland serves as a compelling illustration, with its stock market exhibiting a CAPE ratio of 9.22 at the beginning of the year, ranking as the second-lowest among 26 countries regularly monitored by Barclays Bank. The CAPE ratio, popularized by Nobel laureate Robert Shiller, is noted for its strong long-term track record in forecasting subsequent returns, even considering its performance over the past decade. The overall sentiment surrounding this observation is moderately positive, with an optimistic tone, and the iShares MSCI Poland ETF (EPOL) has a notably positive sentiment score of 0.7, suggesting a favorable outlook for this specific market access vehicle.

Key Decisions for Investors

• Investors should consider re-evaluating U.S.-centric portfolio allocations in light of the observed trend reversal favoring undervalued international markets.
• It may be prudent to explore diversification opportunities outside the S&P 500, with markets like Poland, characterized by low CAPE ratios, warranting closer examination.
• Monitoring valuation metrics such as the CAPE ratio across various international markets, and considering instruments like the iShares MSCI Poland ETF (EPOL) for targeted exposure, could be a strategic approach in the current environment.