POLL: Part of the world with the best 2012 stock returns?

[baw703916]

I'm curious which part of the world Bogleheads will think has had the best stock returns in the past year (using the appropriate Vanguard Index fund as a proxy). WIthout, of course, looking up the numbers--answer based on what you've read on this board, in other places, how your own holdings have done, what you've heard from the hyperventilating crowd on CNBC, etc.

Please no peeking!!

Brad

[empb]

It's only 2012.

[k66]

if we get enough people to respond to the poll, the sheer weight of our combined input will change the future...

[Aptenodytes]

I'm curious which part of the world Bogleheads will think has had the best stock returns in the past year (using the Vanguard Index fund as a proxy). WIthout, of course, just looking up the numbers--answer based on what you've read on this board, in other places, how your own holdings have done, heard from the hyperventilating crowd on CNBC, etc.

Please no peeking!!

Brad

Is it already 2014 where you live? What time zone is that?

[baw703916]

Sorry about the year--fixed now.

[midareff]

Seems to me that the FTSE Small x-US (VSS) and Emerging Market Bonds (FNMIX) have had fabuluous runs this year. Both some what higher thn the Total US, which has also lagged Total International.

[Majormajor78]

lol - I actually got the answer right

[ResNullius]

For now, I'm USA all the way. The large-cap multinationals provide me with enough foreign exposure. Yes, somewhere in the world the local market is doing better, but the problem is that the somewhere seems to keep changing all the time. I'll stay domestic until China takes over the world, which likely won't be during my lifetime.

[nisiprius]

I got it right, but of course I was taking into account the likelihood that the question would not have been asked unless the answer was mildly surprising.

And I hardly care. One year means nothing. The best one is not the different from the second-best, and during the year the two have fluctuated with respect to each other by more than the current difference. So it's quite possible that it's quite possible that the answer could change before January 1st.

This international skeptic is continues to stay my chosen course, which for better or worse is 20% international equities. Well, actually the other day I noticed I was down to 19.5% and I actually rebalanced all the way up to 21% because the peer pressure in this forum has convinced me that I want to at least be "greater than or equal to," rather than "approximately equal to."

I just tried adding Vanguard Developed Markets Index to the comparison. Mildly interesting. I'm particularly interested in that one because it tracks the EAFE index, and the EAFE index used to be THE index that represented "international stocks" in all the books and charts.

[baw703916]

I got it right, but of course I was taking into account the likelihood that the question would not have been asked unless the answer was mildly surprising.

You're a clever fellow!

[Call_Me_Op]

I guess this justifies limiting equity investments to the US.

[Rick Ferri]

I'm going to wait and then vote for the part of the world that received the least votes.

Rick Ferri

[baw703916]

I'm going to wait and then vote for the part of the world that received the least votes.

Rick Ferri

I think you would want to go with the part of the world that received the least votes from people who follow market timing newsletters and talking heads on CNBC. Bogleheads tend not to be a very representative sample of respondents...

[Rick Ferri]

Bogleheads are human too. We're subject to the same biases as everyone else.

Rick Ferri

[asset_chaos]

That's one of the beauties I find with global indexing. I know for certain in advance that every year I will hold the best performing region, sector, country, asset class, or however you want to slice the market up. I also know for certain in advance that every year I will hold the worst performing region, sector, etc. Basically I know that the only thing I know for certain is that I have no way of knowing in advance which segment will be which.

[nisiprius]

I guess this justifies limiting equity investments to the US.

????? Why, when Total World returned 17.85% year-to-date, while Vanguard European Stock Index returned 21.73%? Did I make a mistake looking up the numbers? Or are you assuming the majority had the correct answer? Or are you making a subtle ironic point I'm missing?

[Rick Ferri]

I'm voting for Pacific (Vanguard Pacific Index Fund Admiral shares). It's the fund with the maximum pessimism.

Rick Ferri

[Noobvestor]

I guess this justifies limiting equity investments to the US.

????? Why, when Total World returned 17.85% year-to-date, while Vanguard European Stock Index returned 21.73%? Did I make a mistake looking up the numbers? Or are you assuming the majority had the correct answer? Or are you making a subtle ironic point I'm missing?

I'm not C_M_O, but I think I can field this one: the implication of the poll, results being heavily tilted toward the US, which in fact performed worse than international, suggests people just assumed the US did the best without having really paid any attention, and perhaps will continue to assume that going forward. In other words, it belies a pervasive US bias that could in turn suggest the US may be over-invested.

Obligatory international-investing mini-rant: I know you're not one of them, but there seem to be people on this forum that think there is a free lunch in US investing *beyond currency issues and fees* - that it is politically and/or economically safer to invest in the US, but that equity markets do not factor this in (or, conversely, they don't put a price on political risks elsewhere). Regardless, I think this year is a good reminder that despite apparent progress in the US and heavily-reported turmoil abroad, equity markets are unpredictable, and often climb walls of worry.

[baw703916]

I'm voting for Pacific (Vanguard Pacific Index Fund Admiral shares). It's the fund with the maximum pessimism.

Rick Ferri

Certainly that makes it a good prospect in 2013.

[ruralavalon]

I'm curious which part of the world Bogleheads will think has had the best stock returns in the past year (using the appropriate Vanguard Index fund as a proxy). WIthout, of course, looking up the numbers--answer based on what you've read on this board, in other places, how your own holdings have done, what you've heard from the hyperventilating crowd on CNBC, etc.

Please no peeking!!

Brad

I peeked . I didn't vote, so did not mess up your poll.

I can't say I was surprised at the answer, because I had never really thought about this before.

[stlutz]

People who split their equity among US, Europe, Pacific, and Em. Mkts. and who rebalance on a regular basis should have all gotten this question correct without looking anything up.

[baw703916]

bump.

[peppers]

I was waiting for the last round of monkey tosses.

[baw703916]

I'm impressed. For a while it looked like the U.S. was going to be the #1 choice. But by a narrow margin, Bogleheads did pick the correct choice (barring some huge market move in the next 4 trading days), Europe.

The numbers from Vanguard as of Friday's close:

European Index Fund: +20.77%
Emerging Markets Index Fund: +16.63%
Total Stock Market Index Fund: +16.58%
Pacific Index Fund: +14.96%

I'm guessing that if the poll had been taken among 79 non-Bogleheads, it's much less likely that the correct answer would have been the #1 choice.

Thanks to Larry and Rick for inspiring this thread. Rick's thread about his "'Tis the season for predictions" blog post reminded me of a column that Larry had written earlier this year going over "sure thing" predictions, one of which being that nobody in their right mind should invest in Europe.

Stay the course, ignore the prognosticators, remember that "past performance doesn't guarantee future results" cuts both ways, and happy holidays and a good 2013 to all.

Brad

[gkaplan]

I thought it was a trick question. I own the last three funds, as well as Vanguard Value Index, Vanguard Small-Cap Value Index, and REIT Index funds (all in Admiral Shares), as well as the Vanguard FTSE All-World ex-US Small-Cap Index Fund. Just looking at my Portfolio Watch List, I know that the European Stock Index Fund has been ahead of the rest of these funds for about the last six months or so.

[baw703916]

I thought it was a trick question. I own the last three funds, as well as Vanguard Value Index, Vanguard Small-Cap Value Index, and REIT Index funds (all in Admiral Shares), as well as the Vanguard FTSE All-World ex-US Small-Cap Index Fund. Just looking at my Portfolio Watch List, I know that the European Stock Index Fund has been ahead of the rest of these funds for about the last six months or so.

I didn't really intend it to be a trick question, provided one has paid attention to actual returns rather than prognostications of doom and gloom. In any event, congratulations on being well diversified, well-informed, and staying the course.

[baw703916]

Here are the final returns for 2012 (no change in the rankings from last week):

European Index Fund: +20.99%
Emerging Markets Index Fund: +18.86%
Total Stock Market Index Fund: +16.38%
Pacific Index Fund: +15.63%

All-in-all, quite a good year, with Europe leading the way.

Best wishes to everyone for a happy 2013.