Category: Investing

This article is the third part of a study looking at global and domestic investing from the perspective of local investors.
In Part 1 and Part 2, we took the position of a local investor in one of 16 countries of interest and we explored opposite positions of either investing 100% global or 100% domestic. In Part 2, it became clear that global bonds tend to hurt local investors, while global stocks definitely helped for most scenarios. It is now time to try a middle ground and study portfolios mixing global and domestic stock investments. We will notably look at the mitigation this could bring to the countries having fared the worst, but also consequences for countries having fared better. Of course, it is easy to look at such numbers in hindsight and draw hasty conclusions, so let’s keep in mind that nobody could have predicted winners and losers ahead of time.

Many North American investors tend to look carefully at historical returns in the US and in Canada and draw various conclusions. Occasionally, some references are made to Japan and the UK, but few people look any further. The world changes though. The UK was undoubtedly the world economic leader at the end of the 19th century, while the US clearly dominates nowadays. Japan was on a roll in the 80s, with a bigger market capitalization than the US at some point, and yet badly faltered since then. The world changes in ways we cannot predict and it would be naive to assume that a few decades in the future, the situation will be similar to today’s environment. One thing we can do to get some perspective is to analyze what happened in a larger sample of economies.

This article focuses on the historical returns from 16 developed countries over the past 50 years, looking from the perspective of a local investor and assuming a strong home country bias to begin with (i.e. solely using domestic stocks and domestic bonds). We will look at more diversified portfolios mixing domestic and global investments in Part 3.

In the past decade, a specialized type of fund gained increased popularity, funds implementing leverage over a given index. A previous article explored funds leveraging the S&P 500 index. This article will focus on a portfolio-level approach mixing stocks and …

Leveraged Portfolios – Quantitative Analysis Read More »

(blog article updated in January 2020 to fully factor in returns from 2019) In the past decade, a specialized type of fund gained increased popularity, funds implementing leverage over a given benchmark. The most popular benchmark being the S&P 500, …

Leveraging S&P 500 – Quantitative Analysis Read More »

One of the most popular features of the Bogleheads® forum, and of our closely affiliated Financial Wisdom Forum (Canada) and  Bogleheads® España foro (Spain) forums, is receiving portfolio investment advice. Membership in the forums is free – all one needs …

Getting portfolio investing advice from the Bogleheads Read More »

This follow-up article keeps exploring Time Value of Money concepts in the context of early retirement. The intent is to find a flexible way to manage one’s portfolio savings and annual spending levels in combination with various types of irregular cash flows while waiting for stable fixed income (e.g. social security, pension) to settle in.
As we have seen in Part 1, a few spreadsheet formulas can go a long way. Such ‘annuitization’ approach involves some extra risks though and this follow-up article will discuss ways to mitigate such risks.

This article will explore Time Value of Money concepts in the context of early retirement. The intent is to find a flexible way to manage one’s portfolio savings and annual spending levels in combination with various types of irregular cash flows while waiting for stable fixed income (e.g. social security, pension) to settle in. As we will see, a few spreadsheet formulas can go a long way.

Vanguard international index funds track FTSE indexes. These indexes are described in the wiki.  In response to a request for index tickers, we have added an external link in these pages to a spreadsheet providing ticker information.We expand this information …

FTSE index tickers Read More »

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This article is the third part of a study looking at global and domestic investing from the perspective of local investors.
In Part 1 and Part 2, we took the position of a local investor in one of 16 countries of interest, and we explored somewhat extreme positions of either investing 100% global or 100% domestic. It is now time to try a more balanced view of things, and study portfolios mixing global and domestic investments. We will notably look at the mitigation this could bring to the countries having fared the worst, but also consequences for countries having fared better. Of course, it is easy to look at such numbers in hindsight and draw hasty conclusions, so let’s keep in mind that nobody could have predicted winners and losers ahead of time.

Many North American investors tend to look carefully at historical returns in the US and in Canada, and draw various conclusions. Occasionally, some references are made to Japan and the UK, and few people look any further. The world changes though. The UK was undoubtedly the world economic leader at the end of the 19th Century, while the US clearly dominates nowadays. Japan was on a roll, had a bigger market capitalization than the US in the 80s, and yet badly faltered since then. The world changes in ways we cannot predict, and it would be naive to assume that several decades from now, the situation will be similar to today’s environment. One thing we can do to get some perspective, is to try to draw some analogies with what happened in a larger sample of countries.
This article focuses on the historical returns from 16 developed countries, looking from the perspective of a local investor, and assuming a strong home country bias to begin with (i.e. solely using domestic stocks and domestic bonds). We will look at more diversified portfolios mixing domestic and global investments in Part 3.