How to Use the US vs International Stock Return Comparison
Every long-term investor eventually asks how much of their portfolio should sit in US stocks versus international (ex-US) stocks, and the honest answer starts with seeing what different assumed return rates would actually do to your money over time. Enter your principal, an annualized return assumption for US stocks (the S&P 500 is a common proxy), an annualized return assumption for international stocks (the MSCI ACWI ex-US index is a common proxy), and your investment horizon, and this calculator compounds both scenarios and shows the final value gap.
Even a small gap in annualized return compounds into a large difference over long horizons — two or three percentage points a year can look minor at first but produces a dramatically different ending balance after 10 or 20 years. That's exactly why home-country bias (overweighting the market you live in) is worth examining with real numbers rather than gut feel.
Keep in mind this is a simplified comparison: it doesn't account for currency translation effects, taxes, or trading costs, and the rates you enter are assumptions, not guarantees — US and international market leadership has rotated across different decades historically. Many long-term investors choose to hold both US and international allocations rather than betting everything on one region.
Frequently Asked Questions
No. This calculator compares the local annualized returns you enter for each market and does not model currency translation effects, which can add to or subtract from a US investor's actual international returns.
No. Historical annualized returns are a reference point, not a guarantee. Leadership between US and international stocks has rotated across different decades, so it's worth comparing several rate scenarios.