1 No-Brainer Vanguard ETF to Buy if You Think U.S. Stocks Are Overvalued

The S&P 500 (SNPINDEX: ^GSPC) scale conscionable finished its 3rd consecutive twelvemonth of 15%+ full returns. It's already up different 2% to footwear disconnected 2026 (as of Jan. 28, 2026).

But there's a increasing occupation investors request to face. U.S. stocks person gotten historically expensive.

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Currently, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is trading astatine a price-to-earnings (P/E) aggregate of much than 28. The Vanguard Information Technology ETF (NYSEMKT: VGT) is trading astatine astir 39 times earnings. Outside of 3 different utmost periods -- the tech bubble, the fiscal crisis, and the COVID-19 pandemic -- the S&P 500 has ne'er traded astatine arsenic precocious of a P/E ratio arsenic it is close now.

We've already seen investors migrating toward much value-oriented stocks. That has included antiaircraft sectors, specified arsenic user staples and utilities, low-volatility stocks, and tiny caps. They've besides recovered opportunities overseas.

Trading astatine steep discounts to the S&P 500, planetary stocks besides person the payment of a stronger aboriginal maturation illustration and much accommodative monetary argumentation conditions. This radical had a beardown 2025, but I judge the Vanguard Total International Stock ETF (NASDAQ: VXUS) could beryllium acceptable up for a longer agelong of outperformance.

The vantage of planetary stocks goes beyond conscionable axenic worth (although with a P/E ratio of conscionable 17, the Vanguard Total International Stock ETF is astir 40% cheaper than the S&P 500). There are differences successful assemblage allocations, economical maturation forecasts, and monetary argumentation backdrops that marque overseas investing look comparatively much attractive.

According to a caller International Monetary Fund (IMF) projection, the United States system is expected to turn 2.4% successful 2026. That's amended than expectations of 1.3% and 0.7% maturation for the Eurozone and Japan economies, respectively. But emerging markets could beryllium wherever the biggest boost comes from. The IMF is calling for 4.2% maturation from this group, including 5% maturation successful Asia. Given that these economies are cardinal to artificial quality (AI) development, they could thrust planetary maturation for the adjacent fewer years.

Investing internationally besides represents a pivot distant from the tech-heavy creation of the S&P 500. Within the Vanguard Total International Stock ETF, the apical assemblage holdings are financials (23%), industrials (15%), exertion (14%), and user discretionary (10%). Instead of the top-heavy, concentrated tech vulnerability successful the S&P 500, planetary investing expands its exposures to overweight cyclicals, but keeps immoderate of that halfway maturation allocation wrong the portfolio. As the marketplace broadens retired and the fig of outperformers grows, much diversified funds could person the precocious hand.