What does your allocation to international stocks look like? Like, Comment, and Share with a friend who overweights U.S. stocks.

@jugzster

Жыл бұрын

Whatever the allocation is in my global index fund 🙂

@OptimizedPortfolio

Жыл бұрын

@@jugzster About 40% right now! :)

@ryankirschman5727

Жыл бұрын

80% Total US and 20% International. Right between market cap and that Boglehead Authority Bias

@couldbe8348

Жыл бұрын

If one has to take RMDs is it more important then to diversify since potential big losses in one of the first years of investing would take years to get back to even and RMDs in those interim years would impact compounding?

@OptimizedPortfolio

Жыл бұрын

@@couldbe8348 Exactly. It's called sequence risk: www.optimizedportfolio.com/sequence-risk/

With the nutty US political landscape, investing internationally is looking better than ever to me...

@OptimizedPortfolio

2 ай бұрын

Indeed

"If you're watching this, chances are you live in the U.S. You probably also are overweight..." 0:37 That's a low blow, man. It's genetic.

@OptimizedPortfolio

Жыл бұрын

Hah. "You also probably overweight..."

@SamuraiUploads

5 ай бұрын

Its not genetic just exercise

I like that your videos are very succinct and to the point. Thank you!

@OptimizedPortfolio

3 ай бұрын

Thanks!

Great video, your presentation skills are improving! My allocation is 45% US stocks, 22% EM stocks, 23% INT developed stocks, 10% US treasury bonds.

@OptimizedPortfolio

Жыл бұрын

Thanks!

Phenomenal video. Thanks!

@OptimizedPortfolio

Жыл бұрын

Thanks, Jason!

Fantastic video, great information and tips for everyone! It's as straightforward and rational as it gets!

@OptimizedPortfolio

5 ай бұрын

Much appreciated!

Great videos, keep up the good work. Definitely agree! Everyone should have U.S. and international stocks.

@OptimizedPortfolio

5 ай бұрын

Thanks!

Your account deserves more likes and subs, always great content. I personally feel comfortable with about 20% of my portfolio in international stocks (FTIHX)

@OptimizedPortfolio

Жыл бұрын

Thanks!

This is very persuasive. Good job.

@OptimizedPortfolio

6 ай бұрын

Thanks!

Great video. Thanks

@OptimizedPortfolio

7 ай бұрын

Glad you liked it!

1975-1989: - international small-cap index gained 30.3% a year. - S&P500 gained 14.6% a year.

@OptimizedPortfolio

Ай бұрын

Thanks for sharing!

Diversify into the entire world market! US and international! 👌😎❤️💯

@OptimizedPortfolio

2 ай бұрын

🙌

Everyone over at the TSP subreddit really, really need to watch this…that place is a cornucopia of home country bias.

@OptimizedPortfolio

3 ай бұрын

Feel free to share it over there. ;)

Rational Reminder 👍👍👍

@OptimizedPortfolio

Ай бұрын

👍

"you are probably overweight" 😢 Damn.

@OptimizedPortfolio

2 ай бұрын

;)

0:37 “Chances are, youre in the US. You also probably overweight” 😂

@OptimizedPortfolio

8 ай бұрын

;)

MIC DROP 🎤💥

@OptimizedPortfolio

Жыл бұрын

😎

Thank-you for a very informative and thought-provoking presentation. There is a lot to unpack in this video, especially with regard to diversification and cognitive/behavioral bias. My portfolio is 60/40 (US/Int'l) for equities and 80/20 on the fixed income side. Thanks to the research and information you've introduced and provided, my core equity holdings have evolved along the lines of your aggressive Ginger Ale portfolio.

@OptimizedPortfolio

Жыл бұрын

Thanks, Greg! Sounds good to me.

What are you thoughts on betterment? I have a 90/10 stock/bond portfolio that they create and of the stocks, it’s a 60% domestic, 40% international composition. I compared it to a 2050-2070 target date fund and they’re virtually the same idea except I’m paying a little higher fees for tax loss harvesting and rebalancing.

@OptimizedPortfolio

8 ай бұрын

Admittedly don't have a lot of experience with or knowledge about Betterment.

Hey John, do the advantages of a higher international allocation (like 30-40%) hold up in a tax advantaged account like a 401k? Been reading up on foreign withholding taxes lately and I’m wondering whether this is a big issue

@OptimizedPortfolio

9 ай бұрын

Yea I don't obsess too much over location of int'l assets for US investors. It's usually a wash in taxable because we get Foreign Tax Credit.

@richardreitler8179

9 ай бұрын

Thanks for the reply, that makes sense. But if you were only hypothetically investing in a 401k or IRA and thus couldn’t get a foreign tax credit, would you still maintain close to that 40% international allocation?

@OptimizedPortfolio

9 ай бұрын

@@richardreitler8179 Yes

i'm at 30% international now. i'm not allowing myself to change my strategy until i hit a certain milestone (otherwise i'd be changing it too often) but i'll probably try to go to 35% or 40% after that.

@OptimizedPortfolio

13 сағат бұрын

Thanks for sharing!

If you have no active views and are truly agnostic, an equally weighted portfolio is the optimal allocation. Market cap weighting assumes that the market rewards beta. Of course, the market can only hold the market cap weighting in aggregate, but the individual investor doesn't need to. Equally weighting international equities does represent a technical challenge as there are no equal weight international funds.

@OptimizedPortfolio

Жыл бұрын

I actually thought about including a bit on this but decided not to because it's of little practical use since such a product doesn't exist, as you noted. But wouldn't an untouched EW eventually shift to MCW anyway given enough time? Any future rebalance back to EW is very much an active choice.

JL Collins and his fan club really need to watch this video.

@OptimizedPortfolio

3 ай бұрын

I wish. I've tried to engage him several times over the years.

I feel that optimizing international diversity is to have two-three etfs: europe, asia, south america. These continents' stocks move very inverse from each other. I'm for simplicity in investing, but I don't think having just one international etf is optimized.

@OptimizedPortfolio

Жыл бұрын

Impossible to know ahead of time. If one continent does well, it rises within a total market index fund like VXUS, VWO, or VEA.

I have 6% of my portfolio in SCHY. So, but anyway this maybe a dumb question, but I also have Canadian penny stocks such as BLAGF, PRRSF, VGGIF, WSNAF. So anyway the question is do those actually count as international stocks technically?

@OptimizedPortfolio

Жыл бұрын

If you live in the U.S., sure technically. But depends on allocation and I also don't pick individual stocks, especially penny stocks.

@fadisalem2710

Жыл бұрын

@@OptimizedPortfolio I gotcha makes sense

Interesting video. I have been wondering about moving out of 100% NTSX and putting a little into NTSI, this might have sealed the deal for me.

@OptimizedPortfolio

Жыл бұрын

Big fan of NTSX, NTSI, NTSE.

Serious question: in tax advantaged accounts overweighting the US may enhance the tax advantage. What are your thoughts on home bias in such accounts?

@OptimizedPortfolio

Жыл бұрын

How so? By then overweighting international in taxable accounts? That's reasonable if you the extra management logistics don't bother you.

@siegfriedfurtwanglerknappe6188

Жыл бұрын

@@OptimizedPortfolio Yes. If foreign withholding taxes are unavoidable either way, but are tax deductible in taxable accounts, but US dividends are completely tax free in tax deferred accounts, then wouldn't in theory it make US stocks more appealing than they are in taxable accounts?

@Bumeism

6 ай бұрын

@@siegfriedfurtwanglerknappe6188depends ln your tax bracket

@starwood1977

3 ай бұрын

It’s the tax cost ratio that matters, not foreign tax credit by itself. Right now, international funds have much higher tax cost ratio.

@siegfriedfurtwanglerknappe6188

3 ай бұрын

@@starwood1977 But assuming you want certain exposure to international stocks. Wouldn't it make sense to focus on avoiding the taxes that are avoidable and just using the tax credits on the ones that are not?

I live in Canada, and hold 1/3 each of Canadian stocks, US stocks and Canadian bonds. I don’t want the political or currency risks of investing in foreign countries, as well as withholding taxes outside of my RRSP. There are enough multinational companies in the US, as well as strong companies I am very familiar with in my own country, that I have never felt the need or inclination to take on foreign risks, and I have been fully invested since 83

@OptimizedPortfolio

Жыл бұрын

Thanks for sharing. The "multinational companies" argument has been thoroughly debunked. But I'm glad things have worked out for you. Best of luck.

AVUV, AVDV, AVES and chill

@OptimizedPortfolio

Жыл бұрын

SCV 😎

@BertaBeast

7 ай бұрын

Avee now?

Okay but what about bonds? Two questions: should we even consider investing in bonds? And if so should we include international as well?

@OptimizedPortfolio

3 ай бұрын

The evidence seems to indicate international bonds are unlikely to help and unlikely to hurt the portfolio. As usual, your asset allocation should depend on your personal goal(s), time horizon, and need, capacity, and tolerance for risk. There is no single answer for whether or not everyone should consider bonds. I think most people should, simply because we know most severely overestimate their tolerance for risk.

@ghazikerkeni7031

3 ай бұрын

@@OptimizedPortfolio thank you for your reply. If I can further expend this... What if we are not from the US, investing into international or just US or just the country we reside in becomes the three choices, but when thinking about risk, isn't cash the absolute zero risk (asset) out there? Because again not residing in the US we are confronted to currency risk as well when holding US bonds. And one more final thing, buying assets like international bonds (something like bndx or iagg) would be hedged for US dollars, coming from a country that has a currency weaker than US dollars (now and most of the time) would not be in our favor) buying our own country bonds will be either not threw ETF ... So much more complications

@OptimizedPortfolio

3 ай бұрын

@@ghazikerkeni7031 Gotcha. Perhaps a different consideration for you then. We consider US Treasury Bills to be the risk free asset, yes.

Just need a chart showing better risk adjusted returns.

I am slowly increasing my international exposure over time simply due to valuations. Even though countries like Japan, UK, France, China, Brazil, etc all have their own issues, US stock prices have simply gotten too rich. And this is even though I believe more in the US economic engine more than those countries'.

@OptimizedPortfolio

4 ай бұрын

Indeed

Trees don’t grow to the sky… I hope I’m wrong, but the AI bubble will pop. Sadly, the US market has gone mad. Wreckless spending and mountains of debt. Bogle suggested 20% max. I’m sitting around 30% international. Time will tell. I think diversification is key.

@OptimizedPortfolio

Ай бұрын

Indeed, only time will tell, which is why I diversify globally to not try to make a bet either way.

Another great video. I understand the rationale, but Portfolio Visualizer doesn't really show a clear and compelling case when looking at risk-adjusted returns.

@siegfriedfurtwanglerknappe6188

Жыл бұрын

Because we just came out of an US bull market that lasted a decade or so, though. If you make a portfolio that's 50% Nvidia and 50% Tesla, it will have had much higher risk adjuated returns on Portfolio Visualizer because you're picking winners. So excluding countries that have recently underperformed will look like it has higher returns for the risk.

@OptimizedPortfolio

Жыл бұрын

That's only true in recent years. Also, can't eat Sharpe.

Those international stocks just keep doing nothing though.. down another 1%+ today smh

@OptimizedPortfolio

3 ай бұрын

Appreciate that we can't know performance ahead of time and US and ex-US tend to trade off in cycles. Remember recency bias and outcome bias are not a basis for portfolio construction. Emerging Markets also just beat the US for the 2 decade period 2000-2019.

I’m 55/45 US/INT

@OptimizedPortfolio

Жыл бұрын

Right at market cap weights. Thanks for sharing!

Why 50-50? Is 50-50 optimal in some sense?

@OptimizedPortfolio

2 ай бұрын

"Optimal" can only be known in hindsight. Global weights are roughly 60/40 right now so I just choose to not concentrate in the US.

What % do you allocate to the emerging markets?

@OptimizedPortfolio

5 ай бұрын

I do 25%.

@exnecross3141

4 ай бұрын

​@OptimizedPortfolio 25%? bro.. I feel second hand embarrassment by all the money you're throwing away.

@OptimizedPortfolio

4 ай бұрын

@@exnecross3141 How's that?

@exnecross3141

4 ай бұрын

@OptimizedPortfolio if you'd just go 100% on voo you'd have so much more money. Back when I started investing in my 20s I got suckered into the foreign stocks and bonds meme. I feel bad for new investors these days making the same mistake.

@OptimizedPortfolio

4 ай бұрын

@@exnecross3141 "If you'd just gone 100% in Apple 30 years ago you'd have so much more money." See the problem?

It’s very good internacional diversification. I invest in USA and internacional.

@OptimizedPortfolio

Жыл бұрын

Thanks for watching!

First of all great video and thanks for making it. If I understand it correctly the data backs it up, that it makes most sense to invest in the entire market. Personally I just don't really feel safe or comfortable with emerging markets going forward. I don't like that so many emerging markets are so unstable and filled with corruption like China or India. And I see the world going from a more global world, to a more regional world. Where the Western countries will be more self sufficient, and the same with China, Russia, India and so on. I think it was like an anomaly what has happened with China. Because they West wanted to make a cheap buck, and thought China would liberalize more, which they did, until Xi Jinping got into power, and it reversed back to an authoritarian police state. Isn't the emerging market index 30% china, and a big chunk of India and so on? Personally I have a difficult time understanding how South Korea and Taiwan can be a part of emerging markets, when they have top notch technology like Samsung, and Taiwan Semiconducters. Which is a shame, as I wanted them in the MSCI world index, with only developed countries. So because I don't like China, India and so on, and they fill the emerging market index so heavily, I feel bad about buying the total market index. But what do you think about that? Am I just silly for thinking like this. Because some weird bias? Also I think it is obvious the future is teach heavy, just like it has been the last couple of decades, and US seem to dominate that sector. US also has that advantage they geographically are isolated from conflicts, and they are a very capitalistic country caring a lot about their business, and stock market. Compared to other countries like Denmark. Where the politicians barely are aware of the stock markets existence, and have very social politics. Something taking all this into consideration I just have a difficult time seeing the world which is much more fragmented and in conflict beating the US on average, also going into the future. US is one big country, with one big infrastructure, having tons of brain power migrating to it, while Europe is a lot of fragmented small countries, with fragmented infrastructure, and constant friction and conflict. What I am trying to say is just that I don't feel it is that easy to choose between S&P500, MSCI world, and total market index. Even as a European, all things considered I would probably feel better with the S&P500. But I am still new, and heavy doubt about my own blind spots and bias. S&P500 > MSCI World > Total market is what I am most comfortable with so far. But please tear me apart so I can learn ;).

@OptimizedPortfolio

Жыл бұрын

Thanks for watching and for the thoughtful comment. Leading tech neither makes a developed country nor drives stock market returns. I've got some comments here related to that: www.optimizedportfolio.com/qqq-vs-spy/ Tech revolutions have also been poor investments historically: www.pwlcapital.com/investing-technological-revolutions/ Good companies tend to make the worst investments and bad companies as a group tend to make the best investments: papers.ssrn.com/sol3/papers.cfm?abstract_id=1540757 Oddly enough, Denmark has had one of the strongest stock markets historically. The economy is not the stock market, and GDP growth and stock returns have been negatively correlated historically: onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-6622.2012.00385.x It sounds like you're trying to predict the future. I don't do that. Again, that's my main point in the video. I would say the predictions you describe about individual countries are the precise reason for diversifying among all of them. There are unknown unknowns to which the U.S. is not immune. You may like the funds EMXC and XSOE if they're available to you.

@JohnDoe-gf5he

Жыл бұрын

@@OptimizedPortfolio Thanks for taking your time to make such a quality response with links/data to your statements. It is indeed somehow making a prediction based on how the world is going politically. Predicting that the world is becoming less global, which already seems to be happening with the bad relation between China, US and the West, and the countries changing their supply lines not to be too dependent on their adversaries. How can we even trust what comes out of China when it comes to their company numbers, and stock market, when they're literally known for lying or being secretive about it? I understand that the exact future is impossible to predict, but overall we still usually have a good idea about how the world in broad terms will develop based on recent trends. I am just curious about how you still can feel comfortable and 'chill' about the total market, when emerging market countries like China is THIS shady, and were moving away from what made emerging markets great in the first place. That China and the West had a good relation and liberalized. And what do you think about the arguments for US having a comparatively advantage because of their geography, infrastructure, and attitude towards business' and the stock market? Btw I am from Denmark, that is why I used the Denmark example. So were a bit limited in ETFs over here in Europe. There's a few BlackRock and iShares ETFs on the German exchange. There's like Vanguard S&P 500, Lyxor MSCI World, and iShares MSCI AWCI. I've also heard that the economy and stock market are two different things. But it just confuses me when you say it doesn't correlate very much, when I have heard from other investor videos that GDP going up, usually results in a bull market and growing stock market as well.

@OptimizedPortfolio

Жыл бұрын

@@JohnDoe-gf5he I feel comfortable because in a cap weighted index fund, those countries just drop out and then the fund keeps moving along. My total China exposure is probably less than 5%. It's noise. Again, all those "competitive advantages" of the U.S. are already priced in. Would encourage you to look at Ritter's paper on economic growth and/or definitely check out Ben Felix's video here: kzread.info/dash/bejne/Ynl306aagM3QhpM.html&ab_channel=BenFelix

@RazorIsEpic

8 ай бұрын

​​@@JohnDoe-gf5he In simple terms mate, you're overthinking it. You can't control what countries will do, so just get every country. There's a market share per country and they fall out if they fall to meet standards.

Are there any global ETFs that meet the S&P 500 criteria but without the focus on USA only? "The company should be from the U.S. Its market cap must be at least $8.2 billion. Its shares must be highly liquid. At least 50% of its outstanding shares must be available for public trading. It must report positive earnings in the most recent quarter. The sum of its earnings in the previous four quarters must be positive."

@OptimizedPortfolio

Ай бұрын

Not really, no. Arguably AVGE, albeit not an index fund.

@OlexiySamokysha

Ай бұрын

@@OptimizedPortfolio Noted, thank you! I wish they'd come up with something similar to S&P 500 with a global focus. Some of these criteria might be associated with higher quality companies.

@OptimizedPortfolio

Ай бұрын

@@OlexiySamokysha You've definitely got some more options if you split up USA, Developed, and Emerging with funds like SPDW and SPEM.

@OlexiySamokysha

Ай бұрын

@@OptimizedPortfolio thank you! I will look into these.

@OptimizedPortfolio

Ай бұрын

@@OlexiySamokysha SPGM may offer some of this but I have not looked at its index's methodology at all.

I got "I wouldn't have been able to retire in 2020 if I went with VT" bias, but I might go that route if inheritance happens. Stuff is cheap now. The feeling use to be just invest in a broad index fund and ride it's growth through retirement, like the S&P 500, then the total markets got big and FOMO set in. I might miss out on an international run but that's ok. Lack of growth might bog me down too ;-). I think everybody around the world invests in the big guys and then everyone puts the rest of their money in their own thing. US total stock are the big guys like the S&P. I think that human behavior & this condition of the market will be with me my remaining 35 years of living. Unless big changes like China turning into a democracy or something. Maybe US getting decimated in a war but hard to see how people will survive on their 20% allocation in VXUS ;-P

@DefenestrateYourself

6 ай бұрын

Cool opinion that’s not supported by facts. But American exceptionalism is a pleasant fiction that let’s people sleep well at night I guess lol 🫡

Where can I get that shirt :) Do you have color taupe :D

@OptimizedPortfolio

Жыл бұрын

shop.rationalreminder.ca/products/rational-reminder-short-sleeve-t-shirt

The thing is, whenever US sticks outperform, they outperform way more. And there’s also over diversification risk. If it’s all just cyclical (I assume it has to do with the dollar smile) and you’re young, why not DCA it and wait out the cycles until say 10 or 15 years before retirement when us stocks hit or are near their new highs and the you start lowering the risk by increasing international stocks and bonds? The key for DCA is consistence. Make sure you’re comfortable with your choice of index and continue to invest thru high and low. Prove me wrong tho. Maybe it’s still better to have some foreign index fund exposure thru rebalancing?

@marg8315

Жыл бұрын

I also think some minor country bias is warranted to reduce currency risk. Just because us stocks are about 60% of total market cap, it doesn’t mean we should put only 60% of our money in us stocks. Just like Australian stock market, is about maybe 4% of total market cap? But people in Australia are recommending 40% allocation to VAS and 60% to VGS. Another point is, with more diversification, the harder for the etf to track the index and that’s why a lotta international etf underperforms the benchmark index more than just fees and the downward diff is higher than a good old s&p index fund. ETF providers need to fill subs and reds requests all day and so managing exposure when intl stocks are added in and you cannot sell when those markers are closed, makes it more difficult to maintain the same exposure as the index. What ended up happening is, I forgot who did a piece on this but, for a UK investor, a global index fund (where almost 60 percent is us stocks) has to outperform s&p 500 at least 20 bps on an annualized term to make up the diff (not including higher fees associated with investing in global funds). On the other hand, SPX is one of the most crowded trades and so not only it’s easier and cheaper to track and the buy and ask spread is more than one bp.

@OptimizedPortfolio

Жыл бұрын

"US outperforms way more" - again, this has only been true after 2009 and there's no reason to expect that to continue. If assets have imperfect correlation and positive expected returns, no such thing as "over diversification," depending on one's need to take on risk, of course. Market timing tends to be more harmful than helpful. Unexpected outcome can dominate for extended periods, perhaps one's entire investing horizon. See last decade. Timing valuations sounds nice in theory, but even CAPE doesn't really give us reliably actionable info, sadly. Main point is US is not somehow immune to black swans and extended bear markets. Unknown unknowns exist. So it's inarguably safer to have a reasonable allocation to international. Agreed consistency is key. Stay the course, deposit regularly, ignore the noise.

@marg8315

Жыл бұрын

@@OptimizedPortfoliodon’t get me wrong. Huge fan of your content and your blog and I’ve recommended it to my friend who’s just started on the journey. And I 100% see your points and I think the ginger ale portfolio is a great strategy. But it’s kinda hard to type all my thoughts in the comment section. Otherwise woulda loved to get your thoughts on my reasoning. Anyways, great content and keep it up!

@OptimizedPortfolio

Жыл бұрын

@@marg8315 Thanks! Best of luck.

I already watch Ben Felix, but I just like hearing the same thing twice tbh. Wchochamberechochamberechochamber

@OptimizedPortfolio

7 ай бұрын

I'll take it.

Great video! thanks. Audience, yes I might be retarded but I sincerely recommend you getting the playback speed in this video to 0.75%

@OptimizedPortfolio

Ай бұрын

Haha thanks!

VT and chill is good, but it's not as tax efficient as holding two separate funds: one for US stocks and one for foreign stocks. You can't claim the foreign dividend tax credit with VT because it has less than 50% foreign stocks. Also, two separate funds will have a lower cumulative expense ratio. I have a 50/50 split, with all my foreign stocks being held in a taxable account for maximum efficiency.

@OptimizedPortfolio

7 ай бұрын

Indeed.

No more and no less than 20% international stocks in all investing accounts, 401k, Roth IRA, and regular taxable account.

@OptimizedPortfolio

9 ай бұрын

Thanks for sharing!

Really like this video. My biggest pet peeve is people proclaiming they are "fully diversified and have everything in the SP500". It is nothing other than performance chasing like you mentioned.

@OptimizedPortfolio

Жыл бұрын

Thanks for watching! :)

Reddit TSP brought me.

@OptimizedPortfolio

5 ай бұрын

Awesome!

13 years and running now of underperforming US stocks. I just don't see the need for international when many US companies already do business overseas.

@OptimizedPortfolio

Ай бұрын

Statements like these are exactly why I made this video, and I addressed both of them in it.

@DK-pr9ny

Ай бұрын

@@OptimizedPortfolio And I'm still not buying..

@OptimizedPortfolio

Ай бұрын

@@DK-pr9ny Thanks for sharing.

More money is lost diversifying too much than not.

@OptimizedPortfolio

2 ай бұрын

Over most extended rolling periods historically, this is just not true, as I've explained plenty of times. US dominance is a very recent phenomenon. ex-US beat US in 5 of the last 7 decades, and Emerging Markets even just beat the US for the 2 decade period 2000-2019, so I'm not sure what you're talking about.

@jonathangamble

2 ай бұрын

Jack Bogle, Charlie Munger, and Warren Buffet don't do international. US out performs in long term (20+).I think what makes the difference today is the mag 7... my bet is on AI. In any case, I firmly believe 50% is too high for any portfolio. International is for volatility risk. If you're retiring, have at it. If you're 20, invest in US.

@OptimizedPortfolio

2 ай бұрын

​@@jonathangamble Yikes. Where to begin... I feel like I addressed most of this in the video already, but I'll repeat myself. Bogle's reasons for avoiding international were objectively terrible and basically amounted to "the French are lazy." He also later came around to the idea after taking 2 seconds to look at some data. Ironically, had he been able to do so cheaply and frictionlessly at the time, Bogle would have had greater general and risk-adjusted returns over his investing lifetime had he invested globally. But authority bias is not at all a substantive basis for an argument anyway. Buffett is so old that the U.S. is all he's ever known. He's also a picker. The appeal to authority there is completely irrelevant. "Long term," global tends to beat US. You're not looking at a complete dataset if you think otherwise. Again, don't succumb to recency bias. Heck, Emerging Markets just beat the US for the 2 decade period 2000-2019. You think other people don't have the same very high expectations about "mag 7" and "AI" and that those expectations aren't already priced in? Diversifying globally is also not betting against such industries. Global diversification is NOT for volatility reduction (and volatility is also not risk), but rather for the "deep risks" - as Bernstein calls them - inherent of concentrating wealth in a single country's market. One need only glance at Japan, Russia, and Germany as salient historical examples.

@jonathangamble

2 ай бұрын

@@OptimizedPortfolio Bogle never invested in international and only made room for 20% international for other people who insist. I would also argue Buffet's age is exactly why his bias matters; he lived through the 60s etc and has seen it all. He had many winning ex US cycles to still chose US only. I never referred to emerging markets, as to me that is a similar question to having small cap. US has averaged 10% returns while international is 7-8%, so I'm not sure what data set you're referring to? I'm not looking at recency, but long run. Opinion-wise, I believe anyone who thinks it is possible to beat MSFT or GOOG in AI wrong, despite Fidelity's 20 year prediction. What is a risk, but to lose money? I hate when brokers put 20 year olds in 40%+ bonds because of "risk,"... i.e. Indexes always go up... eventually. The real risk is the opportunity cost for a 30-40+ year investment. You believe 50% international makes sense for your timeline. That is your comfort. I think that will hurt most people from the opportunity cost. I'm simply stating there is a risk in NOT having it AND in having it in your portfolio. I don't see having it personally. That is my opinion. I have not seen any convincing data besides cycles for the best future portfolio. The appeal to authority, as you call it, is irrelevant as this is a classic argument for many CFP, FSB, data analysts, and even coders and historians.

Nah. 100% VTI 💪

@OptimizedPortfolio

Жыл бұрын

Nah

My portfolio is 80% USA. It's not because of my home country bias. It's because i want to actually make money 😂

@OptimizedPortfolio

2 ай бұрын

Not sure what you mean.

What are you thoughts on betterment? I have a 90/10 stock/bond portfolio that they create and of the stocks, it’s a 60% domestic, 40% international composition. I compared it to a 2050-2070 target date fund and they’re virtually the same idea except I’m paying a little higher fees for tax loss harvesting and rebalancing.

@OptimizedPortfolio

8 ай бұрын

Admittedly don't have a lot of experience with or knowledge about Betterment.

@user-jf8vk9qm6b

8 ай бұрын

@@OptimizedPortfolio but based on the composition it sounds like I have a good mix?