As we near the end of 2018, the path forward may seem less clear than at the beginning of 2018. After an exceptionally strong 2017, the broad consensus was that international equities would once again outperform on the back of strong global growth and attractive fundamentals. But with a month left to close out the year, this scenario clearly has not played out. International equities – both developed markets as represented by the MSCI EAFE (Europe, Australasia and Far East) and emerging markets as represented by the MSCI Emerging Markets index – have lagged U.S. equities thus far in 2018, despite their outperformance in 2017. As a result, many investors may be frustrated with the current state of their diversified portfolios and wondering if they should continue to hang on to international stocks. The short answer is yes, but to better address this, let’s take a look at the history of relative performance of U.S. and international equities, as well as their relative valuations (i.e., how cheap or expensive they are) after this year’s sell-off.