Some METARs have discussed moving part of their investments offshore to lower risks of investing in the U.S. markets. Maybe that’s not the safest idea?

wsj.com - Americas stock market dominance is an emergency for europe
America’s Stock-Market Dominance Is an Emergency for Europe
Some of Europe’s most notable companies are moving to the U.S., deepening the region’s economic woes

By Chelsey Dulaney and Joe Wallace, The Wall Street Journal, 8/16/2025

So far this year, according to Dealogic, only six companies have gone public in the U.K., raising $208 million, the lowest level in three decades of data. It isn’t much better across the English Channel, despite surging stock markets. Initial public offerings in continental Europe have nearly halved in value compared with last year. Fundraising in the U.S., meanwhile, has jumped 38% to around $40 billion…

And stock-market heavyweights are disappearing, either bought out by American companies or moving their listings stateside, where business is growing faster….

Now, Europe’s stock markets face a crisis of inactivity. Not only are listing volumes moribund—exchanges are shrinking….

European leaders see the withering of these historic exchanges as an emergency—and one of the culprits behind Europe’s economic stagnation, low productivity, and the widening wealth gap between its citizens and Americans. …Politicians fear the continent’s inability to finance and keep exciting companies entrenches American domination over financial markets and reduces Europe’s strategic autonomy…. [end quote]

Remember that stock prices move when investors bid for them. It’s supply and demand. If the demand for stocks on an exchange wither the prices will stagnate even if the company itself is thriving. This will push down the P/E ratios, making the stocks a better value, but the capital gains won’t be there.

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For income-seeking investors the FTSE 100 may be a better choice than SPX. Due to its composition of companies in more traditional, mature industries like banking, energy, and mining, the FTSE 100 is often seen as a dividend-paying index. Many of its constituent companies have a business model that prioritizes returning cash to shareholders through dividends, resulting in a higher yield. The FTSE index currently yields 3.36%.

The cap-weighted S&P 500, on the other hand, is heavily weighted towards the technology sector although the index contains many manufacturing, energy and other dividend-yielding companies. Technology companies often reinvest their profits back into the business for future growth rather than paying out large dividends. (Except for the ones that use their cash for stock buybacks instead of productive reinvestment.) VTI currently yields 1.16%.

This is even more true of the NASDAQ index (QQQ and other ETFs) which is even more heavily weighted toward tech and smaller companies, many of which don’t pay dividends at all.

Anyone who invests in a European stock ETF based in America should be aware that even the Europeans are worrying about the dwindling as the companies move listings to America. Also, any investment in an American brokerage account may be at risk in the event that the U.S. government becomes totalitarian. It’s not the same margin of safety as opening an account overseas and then investing. Of course that would be a huge hassle and also currency fluctuations would become part of the story.

Wendy