International news is particularly dire these days. Russia is threatening to annex parts of Ukraine and use nuclear weapons, while Europe’s heating costs are soaring this winter. China’s growth has fallen amid heightened tensions with the US over Taiwan and trade. The dollar is rising against major currencies such as the euro, the British pound, the Japanese yen and the Chinese yuan.

However, it is not just one year of bad performance for global stocks. Over the past decade, foreign stocks have lagged the U.S. In the 10 years ending Sept. 29, the overall global stock index fund gained just 3.38 percent a year, compared with 11.49 percent for the overall U.S. stock index fund. I have previously held international stocks and been dead wrong. In fact, it was John Bogle, the founder of Vanguard, who advocated avoiding international stocks or holding more than 20 percent.

Is it worth investing in international stocks?

All of the above may sound like I’m making the case to avoid international stocks, but I’m not. I’m a big believer in Warren Buffett’s advice to “be fearful when others are greedy, and greedy when others are fearful.” Being greedy and buying stocks worked well in March 2020 as the fear of Covid-19 quickly sent stocks plummeting in a bear market. Similarly, at the end of last year, fear and selling stocks gave good results while others were greedy. It is the same for all bears and bulls until this century.

Maintaining a target allocation means buying stocks when they go down and selling them when they go up. Although buying low and selling high works better than the reverse, research from Morningstar, a Chicago-based investment tracker, suggests people generally do the opposite. Economic news tends to be worst at the bottom and better at the top of the stock market.

The global news is bleaker than the current Siberian winter. But that news came at a price in the market. This is why the US stock market trades at 16.5 times earnings, while the international stock market is cheap at only 11.3 times earnings. And while the total return issue is far superior, global stocks have returned 4.12 percent over the past year, while U.S. stocks have paid just 1.72 percent. That’s not to say that foreign stocks can’t go lower, but I’m betting that capitalism will survive, at least in most large and strong economies. Any company can go bankrupt, and even a country’s stock market can crash, but not the entire world.

Although Bogle doesn’t own international stocks, Vanguard itself has 40 percent of its shares at retirement allocated to international stocks. Fidelity’s target daily index funds also have about 40 percent international exposure.

My argument is simply that I don’t buy stocks in Colorado (my home state), and you shouldn’t just buy them in your home state. The same goes for our home countries.