Home›ETFs & Funds›Fund Industry›Meb Faber argues for long-term compounding and global…

Meb Faber argues for long-term compounding and global rebalancing

Faber points to valuation levels, saying the U.S. trades at about 42 times its 10-year P/E, and recommends systematic rebalancing rather than exiting.

Reported · Written up by our desk · Fund Industry

ETF Prime’s Nate Geraci spoke with Mebane Faber, founder and chief investment officer at Cambria Investment Management, about his new book, “Investing in America: The Rise of a 250-Year Bull Market,” released July 4, 2026, and his case for long-term compounding. Faber frames modern investing as having been shaped by meme stocks and fast trading tools, and he argues that structural ownership and patient compounding have been the lasting drivers of returns.

Faber said his compounding lesson is to avoid unnecessary interruptions, illustrating the potential of long horizons with the claim that $1 invested in 1800 could be worth $200 million today. He also tied the origins of American growth to early joint-stock ventures, including the Virginia Company and the Plymouth Colony’s Mayflower voyage, and he noted that roughly 55% of American households own stock.

On valuations and allocation, Faber said the U.S. market trades at roughly 42 times its 10-year price-to-earnings ratio, near the second-highest level in history. Rather than moving to cash, he recommended systematically rebalancing into a global allocation, arguing that many U.S. portfolios remain 80% to 100% concentrated in domestic equities.

Faber cited recent performance to support what he called “bull market diversification,” noting that while the S&P 500 returned 17% last year, Cambria’s foreign deep value fund gained more than 50%. He added that this year, with the S&P up around 10%, foreign value is returning 15% to 20% and U.S. small-cap value is up more than 20%, and he highlighted Cambria’s Section 351 conversion program, which has completed five conversions totaling close to $1 billion in assets, with another planned for this fall.

Latest closeS&P 500 7,482.58 ▼0.3%

More like this

Sources