International Portfolio Management: Valuing Markets by Their Prospective Returns Helps Anticipate Relative Performance

International equity allocation is complicated by the lack of valuation metrics that are comparable across markets with differing growth prospects and interest-rate environments. This paper applies the Potential Payback Period (PPP) framework and its derivative, the Stock Risk Premium (SRP), to assess whether equity markets can be ranked ex ante according to their implicit prospective returns and whether such rankings anticipate subsequent relative performance. Using data for eight major national equity markets, SRPs are computed as of February 2025 and compared with realized price performance over the following twelve months. The results show a strong and statistically significant positive rank correlation between initial SRP levels and subsequent market performance (Spearman ρ ≈ 0.71, p = 0.046). Markets identified as highly attractive ex ante—such as South Korea, Japan, and Taiwan—delivered the strongest subsequent returns, while markets with low SRPs underperformed. These findings provide empirical evidence that the PPP–SRP framework possesses meaningful predictive power in terms of cross-market ranking and constitutes a structurally grounded tool for international portfolio allocation, focused on valuation-driven return constraints rather than short-term market timing.