It's not just about the revenue mix: U.S.-based stocks continue to trounce foreign stocks. The Standard & Poor's 500 index is up more than 11 percent this year, while the MSCI EAFE Index, which tracks companies based in Europe, Australia and the Far East, is up less than 4 percent.
"The domestic economy has become the best house on the street for investing," Johnson says. "Our economy is starting to swing in the right direction."
Investors are developing a fear of foreign stocks, while at the same time gravitating to domestic companies for a number of reasons, including the:
Concern about contagion. Investors are looking to safeguard their portfolios as much as possible if the European situation persists, says Hardeep Walia, CEO of Motif Investing, which has created an "All-American" index of companies that investors can buy. The index contains the 40 largest fast-growing U.S. companies that get all their revenue from the U.S., including discounter Ross Stores and drugmaker Regeneron Pharmaceuticals .
Problems in Europe may have indirect effects on most companies, so investors want to insulate themselves as much as possible. Companies in the S&P 500 get about a tenth of their revenue from Europe.
Spotlight on weakness outside North America amid earnings season. Investors are hearing CEOs in second-quarter earnings reports, including Ford and General Motors , repeatedly say their North America businesses are being hamstrung by Europe, says Joe Kinahan, chief derivatives strategist at TD Ameritrade. "Investors are more conscious of European exposure," he says.
Fewer economic ankle weights. While growth is sluggish globally, it's worse in Europe. Furthermore, due to the strengthening of the dollar, U.S. companies selling in Europe are taking a hit when they convert revenue to the dollar, serving as a financial headwind, Johnson says. "The stronger companies with domestic revenue will be the ones that outperform," he says.