Every serious investment textbook on the planet recommends two things. First, buy cheap stocks. Academic studies have confirmed time and time again that, over the long term, value beats growth. Second, diversify your stock investments across the globe. This is the formula that helped global investing pioneer Sir John Templeton make his fortune. Alas, emulating Templeton's strategy over the last decade or so just hasn't worked. But market extremes like this don't last forever. One day, foreign stocks will begin to catch up to their U.S. rivals. But predicting exactly when this will happen is a mug's game. The U.S. Stock Market: First Among Unequals The outperformance of the U.S. stock market compared with its global rivals over the past decade has been astonishing. I track the performance of 47 global stock markets on a daily basis through country-based exchange-traded funds (ETFs). I prefer to look at the Vanguard Total Stock Market Index Fund ETF (NYSE: VTI) because it includes small and midcap stocks and provides a more complete view of the U.S. market than, say, the S&P 500. Over the past decade, the iShares MSCI Emerging Markets ETF (NYSE: EEM), the best-known proxy for the fastest-growing subset of foreign markets, generated average returns of only 3.6% per year. That performance trails the Total Stock Market ETF's 10-year average annual return of 14.7% by a whopping 11.1% per year. Among the 47 global markets I track, the U.S. - as reflected by the Total Stock Market ETF - ranked No. 1 over 10 years, No. 3 over five years (behind the Netherlands and Taiwan) and No. 4 over the last three years. Returns in the U.S. stock market over the past 15 years have crushed all rivals. When Amazon (Nasdaq: AMZN) soon joins Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) in the $2 trillion-market-cap club, the U.S. will have three companies that individually match the annual GDP of Italy – the world's eighth-largest economy. Put another way, the U.S. will have three companies with market values high enough to earn them a place among the top 10 global economies. Such complete domination is historically unprecedented. Only the bubble economy of late 1980s Japan comes close. No wonder the U.S. stock market is by far the most overvalued major stock market in the world. | 
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