The S&P 500 index has delivered an impressive total return of 329% over the past decade, equating to a 15.7% annualized gain, and has risen 8% in 2026 despite earlier volatility. This performance underscores the strength of large U.S. companies like Nvidia, Apple, and Microsoft, which dominate the tech sector. However, analysts suggest that investors may need to reassess their portfolios, particularly if they are heavily concentrated in S&P 500 stocks.

With concerns over elevated valuations and geopolitical risks potentially impacting capital flows, diversifying into international equities could be prudent. The Vanguard Total International Stock ETF (VXUS) is highlighted as a strong option, offering a low expense ratio of 0.05% and a diversified portfolio that includes major players like Taiwan Semiconductor Manufacturing and Samsung Electronics. Although it has lagged the S&P 500 over the last decade, it has outperformed in the past year.

Investors should consider adding VXUS to their core holdings to enhance geographic diversification and mitigate risks associated with a concentrated U.S. equity portfolio.

Source: fool.com