Should you hold foreign stocks?
Owning foreign stocks means not depending on one country. It also brings other currencies, other prices, and long stretches behind the US. It spreads your money without protecting you from every crash.
Probably Owning stocks worldwide is a reasonable starting point. The best split between regions is not settled.
Diversification is not crash insurance
Foreign and US stocks can fall together in a global crisis, and currency moves can make a foreign loss larger for a US investor. That does not remove the benefit of owning businesses in different markets. How closely two regions' investment styles move together cannot settle what owning both is worth.
Valuation is another reason to compare regions. US stocks cost about 41 years of average profits. On a count that puts every country on the same footing, at the end of June 2026, they cost 1.7 times what the rest of the developed world costs and 1.85 times what emerging markets cost. Of the 4.7% a year by which US stocks beat foreign stocks over the 35 years to 2024, about 3.8% came from US stocks becoming more expensive and 1.1% from faster earnings growth. Japan, Korea and Taiwan are priced at or above the US, so "international is cheap" is true of Europe and emerging markets rather than of everywhere.
Across 18 countries over 1870 to 2020, a market this expensive relative to others tended to earn about 1.4% a year less over the next ten years, inside a range running between −7% and +4%, and the "US is expensive" call has been wrong every year since 2011. Treat it as a reason to hold some of your stocks outside the most expensive market in the world, and never as a forecast.
How much, and how to get there
The world's stock market is about 64% US by size, so the 65/35 US/foreign split every portfolio here uses is roughly the world market itself. A 60/40 split holds 4% more in foreign stocks than the world does and 50/50 holds 14% more; 60/40 is the first stop, and I stop there because I cannot say more.
If you want to change the split, new contributions and distributions can reduce the need to sell. How long that takes depends on the size of the change and how much you add. If cash flows are too small, compare a taxable sale with the risk of keeping the mix you have. Your gains, your tax rate and your reasons for changing all matter. No universal rule says sell or stay put.
Currency
Holding a foreign stock means holding its currency too, and nobody can show whether that adds or subtracts return on average. Hedging the currency takes out 17% to 21% of a foreign holding's swings. The research's answer is to hedge about half the developed-market holding, and only in a retirement account, because a hedged fund pays out large taxable gains in a strong-dollar year. No fund hedges what these portfolios own, so the funds here are unhedged.
What losing looks like
Foreign stocks trailed US stocks for 18 years, between February 2008 and November 2024, and finished 69.0% behind, without catching up. That happened once already, in living memory, and it can happen again. Hold foreign stocks because you have decided the price is right and you cannot pick the winner, and not because you expect it to feel good.