The U.S.'s outsized share of global market capitalization is partly driven by its culture of high stock ownership. With more citizens invested in equities compared to other countries where cash is prevalent, the U.S. benefits from a compounding effect that widens the global wealth gap over time like an "alligator jaw," creating a self-reinforcing cycle.

The US equity market's recent 15-year outperformance is nearly double the historical average cycle of eight years. Forecasters like Vanguard predict international stocks are poised to outperform in the next decade, suggesting a market leadership reversal is statistically overdue and investors should diversify globally.

While politicians tout the S&P's rise, it's misleading. The US market ranks near the bottom (20th out of 21) of Western markets in recent performance. When factoring in the dollar's 10% decline against foreign currencies, the S&P has significantly underperformed its global peers in Europe and Asia.

Nations with high savings rates and small populations, such as Canada and Australia, face a structural challenge: their domestic markets are too small to absorb their own capital. This makes them inherently reliant on the deep, liquid U.S. markets to deploy funds from their pension and superannuation systems.

Despite talk of de-dollarization, the US remains the only market offering superior returns due to its productivity advantage. Recent ex-US outperformance was a short-term anomaly based on perceived geopolitical risks in the US, not a fundamental shift. When seeking returns, capital must ultimately flow to the US.

Contrary to the dominant narrative of US market leadership, European equities have actually outperformed their US counterparts when measured in constant currency terms since the last US presidential election. This surprising trend is a fact that most investors may not realize.

Emerging vs. developed market outperformance typically runs in 7-10 year cycles. The current 14-year cycle of EM underperformance is historically long, suggesting markets are approaching a key inflection point driven by a weakening dollar, cheaper currencies, and accelerating earnings growth off a low base.

While US equities have traditionally been a bellwether for global sentiment, a significant rotation is underway. Stagnant US tech stocks are being overshadowed by strong performance elsewhere, with European equities up 6% and Emerging Market equities up 13%. This suggests capital is flowing into other markets, reducing EM's dependence on US performance.

While the S&P 500's 19% gain since last year seems strong, it significantly lags global performance. An ETF tracking worldwide stock markets is up 42% in the same period, with markets like South Korea and the Eurozone showing even larger returns. This indicates a potential "sell America" trend among global investors.