VEA: Do Not Confuse Cheap Price With Good Bargain
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Developed ex-US stocks, despite lower prices, are not necessarily better bargains than US equities when considering dividends and book values. US equities offer higher required returns due to superior dividend growth and profitability, making them more attractive despite higher valuations.
December 08, 2024 | 8:45 am
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The Vanguard FTSE Developed Markets ETF (VEA) is not as attractive as US equities despite its lower price, due to less favorable dividend growth and profitability.
The article suggests that while VEA, representing developed ex-US stocks, is cheaper, it lacks the dividend growth and profitability of US equities. This makes US stocks more attractive, potentially leading to a short-term negative impact on VEA's attractiveness and price.
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