A common way to see if stocks are expensive is to look at their price to earning ratios.
The higher the ratio, the more expensive the stock looks.
After the recent run, US stocks are looking a little pricey.
Examining these ratios gives us a clue of where we should be investing.
Historically US and European stocks tend to move in the same direction, with the European stocks never quite getting as expensive as US stocks.
Recently, with the big run up of US stocks, there is quite a divergence in the ratios between US and European stocks.
The US stocks have become expensive. The European stocks are quite a bit cheaper.
Financial adviser Rick Reagan suggests that if you don’t own any international mutual funds, you should, because they look like the better buy than US stocks.