What's wrong with going all-in on US stocks?

The returns look great, but you're taking 'single-country risk' — currency, policy, and valuation all concentrated in one market. Past US dominance doesn't guarantee the future; geographic diversification is insurance for when the wheel turns.

How much international is enough?

Global market cap is roughly 60% US, 40% international, so a 'market-neutral' approach holds nearly 40% abroad. Whether to deviate depends on your conviction that US strength continues — adjust international's expected return in the calculator and watch the best mix move.

How should a non-US investor think about 'international'?

For investors outside the US, US stocks are themselves international. The point is not to let any single market dominate. Think of the 'international' slice as 'global markets outside your home and the US,' a tool to diversify single-country risk.

← Back to the full Portfolio Allocation Optimizer

US vs International: Is Geographic Diversification Worth It?

A decade of US dominance has tempted many to go all-in on US stocks. But 'one market wins forever' has never been a law. This page works out whether spreading some abroad drags your return or buys you insurance.

Portfolio Allocation Optimizer

Two assets, one question: how much in each? Set their return and volatility, and let the simulation find your optimal split.

Capital & horizon

Starting capital

Time horizon

yrs

Asset A

Preset

Expected return (CAGR)

Volatility

How wildly yearly returns swing around the expected return. A broad stock index sits around 15%; single sectors and leveraged products are far higher.

Asset B

Preset

Expected return (CAGR)

Volatility

How wildly yearly returns swing around the expected return. A broad stock index sits around 15%; single sectors and leveraged products are far higher.

Advanced

How the two move together

Correlation measures whether the two assets rise and fall together. The less they move in lockstep, the more a blend cuts risk — that's the whole point of diversification.

Rebalance yearlyEach year, sell the winner and top up the laggard to restore your target split. This is the standard assumption behind the efficient frontier and is what makes a blend’s lower risk durable. Turn it off to see buy-and-hold drift toward the higher-return asset.

Limit max drawdownCap how deep a peak-to-trough fall the recommended mix may risk. Each strategy then picks the best split that stays within the cap, pushing the answer toward the steadier asset. A cap looser than the calmest mix changes nothing.

Drawdown cap

Optimize for

Picks the split with the best return per unit of risk (CAGR ÷ volatility). Usually an interior blend, since diversification lowers risk faster than it lowers return.

This is a risk-adjusted ratio (the Sharpe ratio), NOT a win rate. It measures how much annual growth you get per unit of volatility you endure — higher means a more efficient trade-off. A blend often scores highest because diversification cuts volatility faster than it cuts return.

Optimal allocation

80% A / 20% B

A = Asset A · B = Asset B

Median 309K · sim. CAGR 7.8% · volatility 14.4%

65–100% Asset A is near-optimal — the exact split barely matters here.

Unlucky (P10)

152K

Typical (P50)

309K

Lucky (P90)

631K

Max drawdown

Median worst peak-to-trough drop along the simulated paths for this mix — the deepest loss you'd typically endure before recovering.

−19.3%

Optimal mix

100% A

100% B

Median ending

309K

318K

259K

Downside (P10)

152K

117K

Volatility

14.4%

15.0%

16.0%

Max drawdown

−19.3%

−20.3%

−24.6%

Ending wealth by allocation

Median10–90% rangeOptimalNear-optimal

Based on 168000 simulated paths. A simplified lognormal model — not a forecast. Real markets have fatter tails and shifting correlations; treat these as rough odds, not promises.

What this scenario works out to

Under these assumptions, the best mix lands near 80% US / 20% International. After 15 years that blend's median outcome is about 307K, with a rough-patch (10th-percentile) value near 151K.

These figures use this scenario's example returns and volatility — swap in your own holdings' numbers in the calculator above.

How to read this result

US and international markets are fairly correlated but not in lockstep, so diversifying still trims some volatility. The catch: US stocks have crushed international over the last decade, so on a pure rear-view basis diversification looks like a 'loss.' The optimiser uses the best risk-adjusted mix. If you believe the US keeps winning, the answer tilts US; raise international's expected return toward parity and the value of diversifying appears. It forces you to be honest about your assumptions.

Good fit: people worried about single-country risk, who don't want their whole net worth riding on one market and can accept trailing in the short term.

Watch out: geographic diversification looks foolish during a US-only bull run — its value only shows up when you don't know which market leads the next decade. Don't bet the next ten years on the last ten.

Common questions

What's wrong with going all-in on US stocks?: The returns look great, but you're taking 'single-country risk' — currency, policy, and valuation all concentrated in one market. Past US dominance doesn't guarantee the future; geographic diversification is insurance for when the wheel turns.
How much international is enough?: Global market cap is roughly 60% US, 40% international, so a 'market-neutral' approach holds nearly 40% abroad. Whether to deviate depends on your conviction that US strength continues — adjust international's expected return in the calculator and watch the best mix move.
How should a non-US investor think about 'international'?: For investors outside the US, US stocks are themselves international. The point is not to let any single market dominate. Think of the 'international' slice as 'global markets outside your home and the US,' a tool to diversify single-country risk.

☕

Support the creator

Did this tool help you? ☕

This is a free side project I built in my spare time. If it saved you time or helped you think through a decision, buying me a coffee keeps the lights on!

Buy me a coffee

How should you split capital between two assets? Set each one's CAGR and volatility, choose their correlation, and simulate thousands of paths to find the allocation that maximizes risk-adjusted return, median wealth, or downside protection.

Built by indigo.la.ringo · AppicLab · Last updated: June 25, 2026