“The next possible cycle low I see for RE is 2008, so it could be at that time that we see another swing down in stocks and up in RE as money shifts.”

Rich’s chart excludes the mini-rallies and mini-bottoms that Chris utilizes to shift money around, even though the overall markets may be headed opposite directions.

Though the American economy is weakening, there are many reasons to limit excessive investing abroad:
1) Foreign companies are dependant upon American consumers.
2) Foreign investors buy American T-bills and stocks, and American investment fuels the foreign markets.
3) Foreign countries will likely deflate their curriencies with the dollar.
4) Political instability.

When the American economy falls into recession, the globe will likey follow. Up to 20% foreign investments are good for diverification, but will not likely escape American decline.