international stock allocation

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international stock allocation

Postby Islander » Tue Jan 29, 2013 10:17 am

According to BeSpoke Investment Group, the US stock market capitalization as a percentage of world market capitalization is 32.7%
Im surprised it's this low. Had assumed it to be about 45%.

Does this suggest we revisit the International stock allocation guideline ie., 20% to 40% ?
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The international stock allocation

Postby shawcroft » Tue Jan 29, 2013 10:24 am

From recent posts, I had also thought the US was 45% and the international was (overall) 55%. I'm interested in what research methods were used to come to the 32.7% figure.
Any references on that in the article?
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Re: international stock allocation

Postby ftobin » Tue Jan 29, 2013 10:26 am

Islander wrote:According to BeSpoke Investment Group, the US stock market capitalization as a percentage of world market capitalization is 32.7%

FTSE or MSCI indexes say 45% is US currently. The easy way to tell is to look at the breakdown of the Vanguard Total World Fund.
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Re: international stock allocation

Postby wesleymouch » Tue Jan 29, 2013 10:41 am

I have roughly half in US and half in International. This helps cushion against dollar devaluation also.
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Re: international stock allocation

Postby nisiprius » Tue Jan 29, 2013 10:56 am

Got a link to BeSpoke Investment Group's paper or announcement? I wonder if they've invented some creative new way to measure market cap. (I'm thinking it might be one of these deals I've seen seeing recently, where they are measuring, not the actual market cap of the actual markets, but the theoretical market cap if companies that don't issue stock or that can't be invested in were part of some fantasy market...)

Added:

Google found me this, but they don't really give their data or methodology, only that they are "using Bloomberg data."
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Re: international stock allocation

Postby BillyG » Tue Jan 29, 2013 11:46 am

This is a good Vanguard study on the subject:
https://personal.vanguard.com/pdf/icriecr.pdf

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Re: international stock allocation

Postby Islander » Tue Jan 29, 2013 11:57 am

The article can be found on their web site under January 2013 archives.

To avoid quibbling over methodology, I'll rephrase my question as follows: If in fact US stock market capitalization is now about 1/3 the world
market capitalization, should we revisit the international stock allocation guideline ie., 20% - 40% ?
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