A gutsy contrarian bet right now is that the strong U.S. dollar will weaken, particularly versus the euro. A secondary bold bet is that U.S. stocks will lag international equities.
Not surprisingly, given that the dollar-denominated returns of non-U.S. stocks rise when the U.S. dollar weakens, the S&P 500 SPX, +1.67% seriously lagged the world stock markets over this five-year period. It lagged the FTSE World Ex-US index by almost five percentage points annualized, and the FTSE Europe Index by almost three percentage points.
There is a strong correlation between contemporaneous changes in the dollar-euro exchange rate, on the one hand, and the performance of the S&P 500 relative to that of the dollar-denominated return European stocks, on the other. The chart above shows the difference: In those months in which the dollar gained ground relative to the euro, the S&P 500 beat the Vanguard European Stock Index Fund VEUSX, -1.61% by an annualized 16.3%.
MktwHulbert Somebody's lying , I believe it's a hyphed up lie .