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Why Bogle Doesn't 'Do' International Investing

Although things aren't perfect, the U.S. economy and U.S. firms are still likely to outperform the rest of the world, says Vanguard founder Jack Bogle.

Christine Benz: How about foreign equities? Given starting valuations, especially in emerging markets, do you see that they might have some return premium versus U.S. equities?

Jack Bogle: Well, that's what the marketplace is telling us. Foreign equities and, particularly, emerging markets are deemed to be cheap. They're selling at lower P/Es--that's clear. The dividend yield isn't a lot higher, but it's probably a little bit higher. But I just think the outlook is so uncertain, given this upheaval in the world economy. If they are importers, they've got a problem; if they are exporters, they've got a problem. Look at poor Australian with China not buying all those natural resources from them anymore--or buying them in tiny amounts.