Search found 2603 matches

by asif408
Tue Mar 12, 2024 3:34 pm
Forum: Personal Investments
Topic: Roth IRA & HSA Allocation Feedback
Replies: 11
Views: 1226

Re: Roth IRA & HSA Allocation Feedback

In your view, is the behavioral aspect more the frustration that goes along with complexity, or the danger that I would abandon the course and actually sell something? Although my portfolio is tiny now, I'm kind of hoping to come up with something that will serve for the long haul even when it grows large (knock on wood). Maybe a little of both. I don't know you personally, so you may have the emotional discipline to handle it. But I'm almost sure you'll spend more time and effort trying to rebalance 17 funds vs. 5. And there are just more possibilities of behavioral slip-ups if one fund in particular is doing very poorly, and the more funds you have the more likely that is to be the case. My advice is to start simpler and then as your por...
by asif408
Mon Mar 11, 2024 12:34 pm
Forum: Personal Investments
Topic: Roth IRA & HSA Allocation Feedback
Replies: 11
Views: 1226

Re: Roth IRA & HSA Allocation Feedback

... hoping for feedback on asset allocation for my Roth IRA and HSA , ... Welcome to the forum. My initial reaction is that you've certainly done your reading, which is good. :happy My worry is that it feels too complex. While this may not be an issue for you now, I suspect that you'll likely need to be tinkering and re-balancing relatively often if you intend to maintain so many small positions. This fact alone can create problems, as you continue to shovel money toward an investment that hasn't performed well. Will you have the ability to stay the course...??? Also, unmentioned, is a tax-deferred 401k plan or Traditional IRA (if applicable) and/or a taxable account. Do you have either of these? Regards, Thank you so much, retired@50! I r...
by asif408
Thu Mar 07, 2024 10:54 am
Forum: Investing - Theory, News & General
Topic: Emerging Markets Stocks have been a complete disaster
Replies: 170
Views: 15835

Re: Emerging Markets Stocks have been a complete disaster

Starting from inception of the Vanguard Emerging Markets Index Fund, in 1994, emerging markets turned in a near-zero return for about nine years, while US stocks were booming. One thing I find quite amusing is that the inception of a new fund category (such as the EM fund in 1994) usually coincides with a time of excitement (and high valuations) in those funds. 1994 was right after EM had a huge multi year run-up. If the fund started in 1988 (which was the start of the EM run-up) the conclusion would likely be dramatically different: https://awealthofcommonsense.com/2017/11/the-emerging-markets-cycle/ The earliest total international funds started around 1990, the peak of the Japan bubble. You can find some esoteric examples where internat...
by asif408
Thu Mar 07, 2024 7:35 am
Forum: Investing - Theory, News & General
Topic: Emerging Markets Stocks have been a complete disaster
Replies: 170
Views: 15835

Re: Emerging Markets Stocks have been a complete disaster

My opinion is that while you're accumulating, something like total int'l fund is fine. But when you cross the retirement line, some change might work in your favor. Funny, I come to the exact opposite conclusion. If I'm nearing retirement or in retirement, I want more diversification, not less. In the accumulation phase I have more time to wait out these 10-20 year period of zero returns in a region. So if someone want to go 100% US, 100% EM, etc. they probably could without much concern. Not so in retirement. You had 13 years of basically zero real returns in the US and developed ex-US markets from 2000-2011, while you had nearly double digit real returns in EM: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2xDtoFQc8M3...
by asif408
Wed Mar 06, 2024 3:39 pm
Forum: Investing - Theory, News & General
Topic: can indexes have low PE and low return for a long time?
Replies: 41
Views: 3924

Re: can indexes have low PE and low return for a long time?

OP, Regarding starting and ending valuations, the only place I've seen something like that is here: https://interactive.researchaffiliates.com/asset-allocation#!/?currency=USD&model=ER&scale=Linear&tab=views&terms=Real&vs=N4IgxgrgTlCmB2AXAygCwIYAdYGED2ANnlCAFzwQEEA0IqAlgCaMICCAzu7Iu2QNoAmagGZqAgJwiALCICsIgGzVZ8hQAZqADk3UAjAHYlBnQcm7x8gWo1XLa-WN2XdSgQMtTJ7m7N1jZQlK6fkEO5nqaGsKiwn7mGvJS7tRJMkpJ6QIODjqSSWYawSIOUsKB0SnCGqVxQrqiujJOImoAurQMzGyc3AAqAJ7YvKR8IACSADIAQiC0OABKsyA4APIAsks4M7QAYgAaS-MAomMg7XRMLPAcXIg46IiwAObE9LDDfKMACivzvYdHHZnajfX7-WhrACawNBf0OrDWXxhICOAEUlkcNq1zp0rvgIEgoG8PiB0GAlvQCBTGEt0AArJawAC2jIgjIA1rS2bQAEawWmIJZgdBLRic2gAM3oSwlJFoLCWqHFIDeFMFtDpmCW8CptHgAC9tXglph1SB2E9GbxaFwhaglk8eaKWTjLgh8YT%2BgMhvwUUzYFAnv...
by asif408
Tue Mar 05, 2024 12:27 pm
Forum: Personal Investments
Topic: Should I close Traditional IRA account?
Replies: 10
Views: 1021

Re: Should I close Traditional IRA account?

Church Lady wrote: Tue Mar 05, 2024 10:31 am If tax law doesn't change, some of your retirement income will be taxed at ZERO percent because it is covered by the personal exemption(s) and the standard deduction. Could you cash in the tIRA when you retire and pay zero tax on the withdrawal?
Interesting point. I consider the 457(b) and HSA might fit that bill, as the 457(b) is pre-tax and the HSA can essentially be used like an IRA at retirement if needed.
by asif408
Tue Mar 05, 2024 12:23 pm
Forum: Personal Investments
Topic: Should I close Traditional IRA account?
Replies: 10
Views: 1021

Re: Should I close Traditional IRA account?

Rocinante Rider wrote: Tue Mar 05, 2024 11:05 am Some custodians (e.g., Vanguard) will allow the account to be opened or to stay open even with a balance of zero. I'm not sure if there's a time limit on this, such as zero balance for more than X months or more than Y years, after which the account would need to be closed. To the best of my knowledge, there is not a time limit. A possible advantage to leaving the account open is that you don't lose access to its past records. If it bothers you to have an open account with nothing in it, it's simple to open a new account when and if you need one.
This is an interesting point, thank you. Mine is with Vanguard so it might be worth it just to have access to those records. I'll have to think through that some more.
by asif408
Tue Mar 05, 2024 8:56 am
Forum: Personal Investments
Topic: Should I close Traditional IRA account?
Replies: 10
Views: 1021

Re: Should I close Traditional IRA account?

I have 4 different accounts currently I'm utilizing to save for retirement: 1) Traditional IRA 2) Roth IRA 3) 457(b) - traditional not Roth 4) HSA The traditional IRA has a small amount of money in it (2% of total funds). I've been gradually converting it to Roth money over the years, and now about complete with that process. About 80% of everything is in the Roth, and the remaining 18% are split equally between the HSA and 457(b). Is there any reason I wouldn't want to convert the remaining traditional IRA money to Roth and then close the Traditional IRA account? It's only a few thousand dollars, so won't put me in a higher tax bracket if I convert. As best as I can tell I can't roll over my 457(b) money to a traditional IRA while I am wi...
by asif408
Tue Mar 05, 2024 8:33 am
Forum: Personal Investments
Topic: Should I close Traditional IRA account?
Replies: 10
Views: 1021

Should I close Traditional IRA account?

I have 4 different accounts currently I'm utilizing to save for retirement: 1) Traditional IRA 2) Roth IRA 3) 457(b) - traditional not Roth 4) HSA The traditional IRA has a small amount of money in it (2% of total funds). I've been gradually converting it to Roth money over the years, and now about complete with that process. About 80% of everything is in the Roth, and the remaining 18% are split equally between the HSA and 457(b). Is there any reason I wouldn't want to convert the remaining traditional IRA money to Roth and then close the Traditional IRA account? It's only a few thousand dollars, so won't put me in a higher tax bracket if I convert. As best as I can tell I can't roll over my 457(b) money to a traditional IRA while I am wit...
by asif408
Fri Feb 23, 2024 3:13 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

What is the global market cap weight of U.S. equities? For us MCW this is important. Answers vary. But SIFMA has it at 42 percent. (?) https://www.sifma.org/wp-content/uploads/2023/04/SIFMA-Research-Quarterly-Equities-2Q23.pdf (this is from a footnote in Cederburg's paper) VT has it at 60 percent U.S. Anyone know the reason for the vast differences. These are guesses, but maybe some of the difference is explained by including non-investable equities outside the US, or including something like all China A shares at their market weight vs. their weight in an EM index? The link you show has China at almost 11% global equities (and separated from EM), which is 4-5x higher than Credit Suisse has in their annual yearbook summary (https://www.cre...
by asif408
Wed Feb 14, 2024 10:05 am
Forum: Investing - Theory, News & General
Topic: What Category of Investment Did Well During the "Lost Decade" (2000s)
Replies: 51
Views: 5432

Re: What Category of Investment Did Well During the "Lost Decade" (2000s)

Broad categories: https://www.portfoliovisualizer.com/fund-performance?s=y&sl=4bwyplc4d4dnCkKKK02x6b International large value: 6.7% US small value: 9.1% International small value: 11.3% EM: 9.8% EM value: 13.9% You could have also gotten double digit returns in less broad investment categories, like energy, precious metals equities, and REITs: https://www.portfoliovisualizer.com/fund-performance?s=y&sl=4kAYbeqginEChxxY852fna Taking into account the last 10 years, seems like VT is the way to go. VT didn't exist in the "lost decade", but Global Ex-US did 2.29% and Total US did -0.27%. So a combo of those at market cap would have maybe done 1%? Not saying it isn't a sound investment, but the topic was about what did well du...
by asif408
Tue Feb 13, 2024 1:07 pm
Forum: Investing - Theory, News & General
Topic: What Category of Investment Did Well During the "Lost Decade" (2000s)
Replies: 51
Views: 5432

Re: What Category of Investment Did Well During the "Lost Decade" (2000s)

Broad categories: https://www.portfoliovisualizer.com/fun ... CkKKK02x6b

International large value: 6.7%
US small value: 9.1%
International small value: 11.3%
EM: 9.8%
EM value: 13.9%

You could have also gotten double digit returns in less broad investment categories, like energy, precious metals equities, and REITs:
https://www.portfoliovisualizer.com/fun ... hxxY852fna
by asif408
Thu Feb 08, 2024 9:53 am
Forum: Investing - Theory, News & General
Topic: Shiller PE seems mostly useless
Replies: 208
Views: 12256

Re: Shiller PE seems mostly useless

There's a paper published in April of 2001 by Robert Shiller himself and John Campbell titled VALUATION RATIOS AND THE LONG-RUN STOCK MARKET OUTLOOK: UPDATE. In it they say, "Following their advice we smooth earnings by taking an average of real earnings over the past ten years. The top right panel of Figure 4 shows the ratio of the January real stock price to smoothed real earnings from the previous year. This price-smoothed–earnings ratio responds to long-run variations in the level of stock prices. It has roughly the same range of variation as the conventional price–earnings ratio, with a slightly higher mean of 16.0, but the record high of 44.9 now appears at the start of 2000 . This record ratio dwarfs the previous record of 28.0...
by asif408
Wed Feb 07, 2024 9:21 am
Forum: Personal Investments
Topic: What's your allocation for International Stocks?
Replies: 101
Views: 6947

Re: What's your allocation for International Stocks?

I'm around 90% international, but I certainly wouldn't advise following what I do. I generally agree with Vanguard that something close to 50/50 is a good starting point for most investors. Part of the reason I have such a high international allocation is because I have a pension and IRA. The pension fund invests heavily in US stocks, so most of that money is dependent on good US stock performance. I prefer to hedge my bets. I would advise if your overall equity allocation is low it doesn't matter, do whatever you want with the stock side. But since you're at 65% equity (which I consider high), it might make more sense to just go half US/half international, giving you overall 1/3 US stocks, 1/3 international stocks, and 1/3 bonds. Seems lik...
by asif408
Mon Feb 05, 2024 2:47 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

Another unrelated thought I had reading the exchanges here was related to valuations, and how members arguing in favor of international stocks point out the fact that US stocks are 2x more expensive than international, and therefore may have a lower expected return moving forward. They say lower valuations of international stocks imply higher risk and therefore higher expected returns. But couldn’t we also think about it another way? Since theory would suggest that lower valuations should lead to higher returns, isn’t it actually more risky to buy stocks with higher valuations in light of that theory? That's exactly right. You're not thinking about it in another way, that is a generally accepted view. This is sort of a reverse psychology k...
by asif408
Wed Jan 31, 2024 12:32 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: USA v International - WSJ article

watchnerd wrote: Wed Jan 31, 2024 11:45 am
asif408 wrote: Wed Jan 31, 2024 9:34 am
watchnerd wrote: Wed Jan 31, 2024 9:15 am
nisiprius wrote: Wed Jan 31, 2024 7:43 am The discussion of US and international stocks on this forum isn't a game and doesn't have teams
Pretty sure there are teams.
What's interesting to me is that one team says I should buy 100% of their team and 0% of the other team, and the other team say I should own 50-90% of the other team and 10-50% their team.
Sounds a bit like marriage.
So which team is the husband and which team is wife?
by asif408
Wed Jan 31, 2024 9:34 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: USA v International - WSJ article

watchnerd wrote: Wed Jan 31, 2024 9:15 am
nisiprius wrote: Wed Jan 31, 2024 7:43 am The discussion of US and international stocks on this forum isn't a game and doesn't have teams
Pretty sure there are teams.
What's interesting to me is that one team says I should buy 100% of their team and 0% of the other team, and the other team say I should own 50-90% of the other team and 10-50% their team.

I would think if there were truly teams one would tell me 100% for their team and the other would tell me 100% for their team.
by asif408
Wed Jan 31, 2024 9:08 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: USA v International - WSJ article

The discussion of US and international stocks on this forum isn't a game and doesn't have teams, and I don't think the article sounds at all like what the USA team says on this board. I don't read everything about US versus international in this forum but I don't remember anyone bringing up European overregulation as a key factor. And it doesn't sound like the cause, because emerging markets are less regulated than the US, and since 2008 they have been underperforming the US, too. I found an unpaywalled copy on MSN... I think it has been stated, just in a different way. Mostly in some iteration of "the US is more business friendly and/or taxes businesses less than Europe". I'm not sure about regulation in EM vs. developed ex-US, ...
by asif408
Mon Dec 04, 2023 1:38 pm
Forum: Investing - Theory, News & General
Topic: Value vs Growth divergence is at all time high
Replies: 66
Views: 9651

Re: Value vs Growth divergence is at all time high

Northern Flicker wrote: Mon Dec 04, 2023 12:02 pm
asif408 wrote: Mon Dec 04, 2023 9:36 am
Triple digit golfer wrote: Sun Dec 03, 2023 6:55 pm For the funds you compared, value has outperformed by about 3% a year for the last two years. So doesn't that mean that the divergence was larger two years ago?
Yes, but we're still in the 3rd inning of the turn, so don't think he's too late to the party.
We don't know if it will be a 3-inning game or 9-inning game.
When this board becomes gung-ho on dumping growth stocks for value stocks that'll be the 10 run rule sign. Until then I'll keep playing.
by asif408
Mon Dec 04, 2023 9:36 am
Forum: Investing - Theory, News & General
Topic: Value vs Growth divergence is at all time high
Replies: 66
Views: 9651

Re: Value vs Growth divergence is at all time high

Triple digit golfer wrote: Sun Dec 03, 2023 6:55 pm For the funds you compared, value has outperformed by about 3% a year for the last two years. So doesn't that mean that the divergence was larger two years ago?
Yes, but we're still in the 3rd inning of the turn, so don't think he's too late to the party.
by asif408
Wed Nov 29, 2023 1:35 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

Semantics aside, it appears that we happen to agree that as Valuations increase, the "chance" :happy that your returns will decrease, goes up..... (Not everyone believes this BTW, but the historical data has convinced me) The analogy would be what happens to potential energy when you push a boulder up a hill. e.g Gravitational potential energy increases as height increases (Remember this exchange started with what was supposed to be a "fun" question) So anyway, I just find it interesting to observe that US stock returns have out-performed Int'l over the last decade, but it's come at the "cost" of them now having lower expected returns..... So perhaps we'll look back 20 years from now and say, yep, US and Int'l...
by asif408
Thu Nov 16, 2023 8:18 am
Forum: Investing - Theory, News & General
Topic: World ex-US returns are only 4.4% - 120 years of data
Replies: 110
Views: 11140

Re: World ex-US returns are only 4.4% - 120 years of data

OP, Why is it interesting that one country's return were significantly higher than a group of 40+ countries? That is to be expected, yet this seems to be something that people are surprised by. Australia and South Africa both had much higher returns than the international index as well. Does that mean you should underweight or omit the poorly performing countries in the index and overweight or only invest in Australia and South Africa? The conclusion certainly shouldn't be invest in the one country with the highest historical returns, or even to overweight that country. The conclusion should be we can't know for sure in advance which country or countries will be higher, and if we pick one we might be starting with 1990 Japanese stocks, or w...
by asif408
Mon Sep 18, 2023 8:59 am
Forum: Investing - Theory, News & General
Topic: Concentration Risk if Overweighting EM Equity
Replies: 18
Views: 1898

Re: Concentration Risk if Overweighting EM Equity

Are we really saying there's concentration risk in overweighting EM beyond it's typical 10-15% weight, despite only 66% being tied up into three countries comprising of thousands of companies, when many on this board have single country risk by being 100% US only, Despite the number of stocks and countries, an EM market index fund is significantly riskier than a US market index fund. (Risk rating of 5 stars on Vanguard for VWO vs 4 stars for VTI). That should not be a controversial position. With EM, any concentration risk of markets amplifies the typical EM risks (geopolitical, currency, etc) relative to greater diversification across EM markets. That is the point of the thread, as opposed to starting yet another thread on whether ex-US d...
by asif408
Mon Aug 28, 2023 9:34 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

Homer - Not everyone agrees with you that Valuations are not actionable, don't matter, etc...., See below: Tony wrote: If I recall (and perhaps Taylor will see this post and be able to add), Mr. Bogle was unsure of his health in the late 1990s. He had (or was scheduled) heart replacement surgery. I vividly recall (because he appeared to accept market timing) Mr. Bogle's statement about increasing his bond allocation. He said it was partly market timing and partly due to his own personal situation. Where does it say Mr. Bogle's allocation change was due to valuations? Seems health related to me, based on what you quoted. No need to guess, here's a video of Mr. Bogle actually describing in detail here: https://www.youtube.com/watch?v=k6ra5PO...
by asif408
Fri Aug 25, 2023 1:58 pm
Forum: Investing - Theory, News & General
Topic: Four Pillars — Metals and Commodity Producers?
Replies: 18
Views: 2846

Re: Four Pillars — Metals and Commodity Producers?

I hold FILL (Global energy producers ETF), SLVP (Global Silver and Metal Miners ETF), and RING (Global Gold Miners ETF). Combined these are ~ 15% of my total portfolio. They've worked well for me over the last 5-7 years. The key with these investments (maybe ever more so with the miners) is to rebalance, that's really where their greatest benefit is, as historically they have low returns. There have actually been a number of excellent rebalancing opportunities in the last 5-7 years in these categories. For instance, from October 2018 to October 2020 RING was up 150% vs. a 12% increase in US stocks and an ~50% decline in FILL. I rebalanced from my gold miners to energy at the end of that period. From October 2020 to October 2022 energy stoc...
by asif408
Thu Aug 24, 2023 1:51 pm
Forum: Investing - Theory, News & General
Topic: Four Pillars — Metals and Commodity Producers?
Replies: 18
Views: 2846

Re: Four Pillars — Metals and Commodity Producers?

I hold FILL (Global energy producers ETF), SLVP (Global Silver and Metal Miners ETF), and RING (Global Gold Miners ETF). Combined these are ~ 15% of my total portfolio. They've worked well for me over the last 5-7 years. The key with these investments (maybe ever more so with the miners) is to rebalance, that's really where their greatest benefit is, as historically they have low returns. There have actually been a number of excellent rebalancing opportunities in the last 5-7 years in these categories. For instance, from October 2018 to October 2020 RING was up 150% vs. a 12% increase in US stocks and an ~50% decline in FILL. I rebalanced from my gold miners to energy at the end of that period. From October 2020 to October 2022 energy stock...
by asif408
Thu Aug 03, 2023 2:30 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455379

Re: Trading Treasuries (nominal and TIPS)

Here's a question, and I apologize if this has already been answered. My understanding is that if I buy a 5 yr TIPS at auction for, say, $1000, and there is deflation during the time I own it until it matures, I will still get my $1000 back, even if the value at maturity is less than $1000. Let's say I were to sell that TIPS after 3 years to someone, and that person bought it at whatever it's current value is, say $1100. If there is deflation for the remaining 2 years until maturity, the person who bought the TIPS from me could end up with less than $1100, but not less than $1000, is that correct? If so, then my conclusion would be that if you buy a TIPS in the secondary market, you don't quite get the same level of protection from deflatio...
by asif408
Thu Aug 03, 2023 9:59 am
Forum: Investing - Theory, News & General
Topic: Are the Valuations of U.S. Stocks Justified?
Replies: 51
Views: 4648

Re: Are the Valuations of U.S. Stocks Justified?

Just to summarize a few of the points made in this thread. Mean reversion in stock valuations is not an inevitability, since there is no fixed mean value that global investors are willing to pay for a dollar of earnings. However, in order for U.S. stock valuations to "mean revert," one or more of these future events will need to happen: • The secular trend toward lower interest rates will need to reverse, increasing corporate financing costs, and increasing the discount rate on future corporate earnings. • The U.S. will need to lose its global preeminence in technology and the commercialization of innovation, leading to a general decline in corporate profitability. • The level of U.S. corporate taxation will need to increase sign...
by asif408
Thu Aug 03, 2023 8:19 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

Does this whole thread(debate) just boil down to "American Exceptionalism" versus "Valuations"? Does every "Argument" just support or refute one of these "book-ends". ? .... WIth "Diversification" acting as the arbitrator of compromise to help some land somewhere in the middle of the two? https://www.bogleheads.org/forum/viewtopic.php?p=7386329#p7386329 The case for including international stocks also includes non-valuation arguments. Two primarily ones are currency and market cap. If US stocks perpetually outperforms, it would eventually be near 100% of market cap. Is it really rational to expect that one country (US) would be the only country that makes up a total world stock index? From ...
by asif408
Wed Aug 02, 2023 2:00 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International (Non-US) versus US Equities (The "Arguments")

For a younger person and say a 40 or 50 year time horizon were do you see US stocks going as a percentage of the world's stock market? 70%? 80%? 90%? 100%? We don't know, but that's not a requirement for the US to do well: https://ritholtz.com/wp-content/uploads/2018/02/Screen-Shot-2018-02-22-at-9.11.22-AM.png I agree with it doesn't mean the US will not have good returns but if I was a young person (or a older person worried about sequence of returns), I would choose not to have 100% US stocks because I see the possibility for international to outperform. Every time that I see such a chart, I am gobsmacked by the US ascendancy starting around 1987-1990. Precisely at a time of greater globalization and diffusion of wealth from the West out...
by asif408
Wed Aug 02, 2023 8:26 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: Frustrated with returns on INTL Stock Index

Would you use the same sort of validation based on historical results to answer other investing questions? Or do you only use it for US versus ex-US? Would you endorse an individual stock, sector, or active manager if validation based on historical data showed that it had done well on certain metrics? How about a market timing strategy that tells you when to get in and out of stocks in general? My own suggestion, as you may have guessed, is to use historical data for hints about what can happen with a broad asset class, but not details. Thus historical stock market crashes provide stock market crashes are possible without predicting them, long-term historical return of stocks give an estimate of likely long-term future returns but with gre...
by asif408
Wed Jul 26, 2023 1:58 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5212
Views: 829399

Re: International versus US (The official list of arguments)

Does anyone on this thread hold a majority position in Int'l..? An evolving takeaway, seems to be that there is very little conviction about the future of Int'l companies.... (Despite there being a very long list of world-class Int'l companies on the planet....) The majority on this forum that hold any Int'l, seem to do so as some sort of necessary evil... A kind of satellite position to their core US holding....Something akin to a bond.... They do it for diversification, "insurance", to-be-complete, because VG thinks its a good idea, maybe-a-little-RTM, no-sense-changing-now... But I'd love to hear from anyone out there that is actually convinced that the long-term future of Int'l is very strong.... What are the reasons....? Her...
by asif408
Wed Jul 26, 2023 10:04 am
Forum: Investing - Theory, News & General
Topic: Bernstein predicts 4% returns over next 10 years -- do you believe it? [Sanford C. Bernstein strategists]
Replies: 81
Views: 11049

Re: Bernstein predicts 4% returns over next 10 years -- do you believe it? [Sanford C. Bernstein strategists]

exodusing wrote: Wed Jul 26, 2023 9:41 am I think it's a bad idea to allocate 100% to any one market, whatever CAPE might be. You don't need any numbers to get to that conclusion, just basic diversification.
The one thing I've found fascinating is to see the innumerable posts that say a 100% US stock portfolio is reasonable (1 market), but when I post that I am basically 100% international (42 or so markets) I generally receive a number of comments that I'm crazy (technically I'm about 95% international). It's quite entertaining to me to hear I'm crazy for owning 42 markets but they (US only holding one market) are not.
by asif408
Fri Jul 14, 2023 2:22 pm
Forum: Investing - Theory, News & General
Topic: Why Total Stock Market Lags S&P Index
Replies: 9
Views: 2261

Re: Why Total Stock Market Lags S&P Index

Take a look a the bigger picture using the investor class shares: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2021&lastMonth=7&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&p...
by asif408
Thu Jul 13, 2023 12:46 pm
Forum: Investing - Theory, News & General
Topic: What asset classes are currently at 3-5 year lows?
Replies: 4
Views: 701

Re: What asset classes are currently at 3-5 year lows?

The easiest way I've found to do this comparison is simply plot several funds from various asset classes in Morningstar. You can specify the start and end dates to compare. For instance, start with VTI (Vanguard Total stock market) then add tickers where it says compare, such as:

VEA (Ex-US developed markets)
VWO (emerging markets)

Here's the link to start: https://www.morningstar.com/etfs/arcx/vti/chart

And you can drill down further if you like with individual countries or sectors and change the timeframe.
by asif408
Wed Jun 14, 2023 1:40 pm
Forum: Personal Investments
Topic: Investing only in VTSAX to reach F.I.R.E... too risky?
Replies: 89
Views: 10437

Re: Investing only in VTSAX to reach F.I.R.E... too risky?

Thanks! So it appears that I indeed would need to diversify VTSAX but I have no idea how to get this accomplished... if I called Vanguard would they be able to help me get my VTSAX setup in such a globally diversified manner? From your reply it appears I would need to select "an equal mix of US, developed ex-US, and EM" in order to be globally diversified. I understand EM is (emerging markets)... but I am confused what "developed ex-US" is? Thanks! Sorry for the delayed response. VTSAX is a US only fund. You could call Vanguard and probably get assistance. You could also simply use the following three funds at Vanguard: Vanguard Total Stock Market (US) - symbol VTSAX Vanguard Developed Markets (non-US) - symbol VTMGX Va...
by asif408
Fri Jun 02, 2023 2:52 pm
Forum: Personal Investments
Topic: Investing only in VTSAX to reach F.I.R.E... too risky?
Replies: 89
Views: 10437

Re: Investing only in VTSAX to reach F.I.R.E... too risky?

The short answer is yes, and the reason is single country and/or regional risk. Look, for example, at the 2000-2010 period: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2010&lastMonth=1&calendarAligned=true&includeYTD=false&initialAmount=500000&annualOperation=1&annualAdjustment=500&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&...
by asif408
Fri Jun 02, 2023 9:49 am
Forum: Investing - Theory, News & General
Topic: Why not growth all the way?
Replies: 56
Views: 4927

Re: Why not growth all the way?

Value has outperformed growth in the US, foreign developed, and emerging markets by anywhere between 8-10% CAGR since November 2020, with much larger drawdowns to boot: https://www.portfoliovisualizer.com/fun ... 2F1%2F2020

Not seeing where growth stocks are leading the way.
by asif408
Wed May 31, 2023 2:03 pm
Forum: Investing - Theory, News & General
Topic: How much International allocation is good insurance?
Replies: 251
Views: 18122

Re: How much International allocation is good insurance?

Mental masturbation. That's all adding Australia or Canada or UK equities to the mix is doing. If you genuinely believe these countries will outperform US equities - go for it. But to think it's adding any meaningful diversification to your portfolio? It isn't. It's like carrying a tube of mace through Ramadi, Iraq. It might make you feel all warm and fuzzy, but it will do nothing. Here's some data instead of hyperbole: 2000-2011: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=4&endYear=2011&lastMonth=4&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&am...
by asif408
Fri May 26, 2023 10:41 am
Forum: Investing - Theory, News & General
Topic: How much International allocation is good insurance?
Replies: 251
Views: 18122

Re: How much International allocation is good insurance?

Nikkei is +19% YTD, however EWJ is only up 8.1% YTD. Looks like USDJPY moved from 128 to 139 YTD, although it is lower than 150 at one point in 2022. The exchange rate is impacting EWJ this much or is there something else going on? A big discrepancy like this is on topic in terms of international allocation being good insurance for the US investors. No response on this? I think it's a pretty big deal when Nikkei is up 19% yet your return on investment as a US investor is only 8.1%. Now I used EWJ as a proxy since I don't know how you'd measure the Nikkei component in VXUS, so YMMV. I would think a big difference is price weighted (Nikkei) vs. market cap weighted (EWJ). And the Nikkei's current composition is almost 1/2 in tech stocks: http...
by asif408
Wed May 24, 2023 1:59 pm
Forum: Investing - Theory, News & General
Topic: How much International allocation is good insurance?
Replies: 251
Views: 18122

Re: How much International allocation is good insurance?

This was my question too, about why holding international makes sense if it tracks U.S. ups and downs closely, but doesn't perform as well. I think that was an argument made by one of the big names in finance, though I don't recall which one. Because magnitude matters as much as direction. Here's an extreme example, but a good illustration: From January 2000-October 2022, the US total stock market and emerging market value stocks have had total returns within 0.1% of each other: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=1&endYear=2022&lastMonth=10&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&...
by asif408
Thu May 18, 2023 7:58 am
Forum: Investing - Theory, News & General
Topic: International Stocks return will be superior to US
Replies: 480
Views: 42182

Re: International Stocks return will be superior to US

I think any communist country or any dictator ship is not worth investing in. I'm trying to think of the dictatorships / communist countries one can invest in: 1. China (to a limited extent, given their capital controls) 2. Saudi Arabia (okay, a actual monarchy, but still autocratic) 3. UAE 4. Russia (I guess not anymore) 5. Vietnam Ummm...who else? I'm sure I'm missing some countries, but the above all put together by free float market aren't that big. Iran, North Korea, Venezuela, Cuba are all off limits due to sanctions. Assuming China is the #2 economy in the world... yeah I mean China. Investing in Saudi Arabia is investing in oil. NK, Venezuela and Cuba are all basket cases so regardless of sanctions, no rational person would invest ...
by asif408
Tue May 16, 2023 1:11 pm
Forum: Investing - Theory, News & General
Topic: International Stocks return will be superior to US
Replies: 480
Views: 42182

Re: International Stocks return will be superior to US

unwitting_gulag wrote: Tue May 16, 2023 12:54 pm Do we have data comparing the UK stock market in the 19th century, with that of the rest of Europe, or the US? This would be fascinating, as in the 19th century, the UK was top-dog. Your list would have been eerily appropriate for the British stock market 150 years ago.
I'm not sure, but we do have UK and US returns going back to the 1800s. Ibbotson and Brinson's "Global Investing" (written in the early 90s) book has UK stock market data going back to the 1800s as well as the US. You'll have to decide how much weight you can give that data, though, given the assumptions that had to be made, which they do reference in footnotes.
by asif408
Thu May 11, 2023 3:30 pm
Forum: Personal Investments
Topic: VTI vs VXUS: Why diversify into international stocks?
Replies: 74
Views: 8844

Re: VTI vs VXUS: Why diversify into international stocks?

please explain in clear terms why 2008 GFC (US sub-prime mortgage crisis) caused *international* to fall -55%, harder than the US equities. Because your premise is false. The housing bubble was global and so was the resulting financial crisis. Assuming everything that could ever happen will look just like that is obviously a bad assumption. The housing bubble was global in the sense that the US made it a global problem. This was a uniquely American problem that was exported to the rest of the world. When was the last time the US imported a significant economic and/or stock market downturn from another country? Japan gets brought up a lot in these debates, but when Japan was in meltdown mode for 30+ years, the US was going just fine; do you...
by asif408
Thu May 11, 2023 7:50 am
Forum: Investing - Theory, News & General
Topic: "The Case For International Diversification"
Replies: 135
Views: 11962

Re: "The Case For International Diversification"

I haven't reviewed the recent prior (& closed) thread on International stocks, nor do I know anything about AQR, so apologies if this was already addressed- How would one in the USA invest in international stocks but also avoid companies located in countries with authoritarian and/or systemically corrupt governments? In other words, thus far I've favored USA companies because there's some semblance of rule of law here with the SEC, which I'm skeptical may exist in many 'emerging markets'. This is only for emerging markets specifically, but this fund is interesting if you are worried about corrupt governments in EM: https://alphaarchitect.com/wp-content/uploads/compliance/etf/factsheets/FRDM_Factsheet.pdf. No China or India, which combi...
by asif408
Tue May 09, 2023 10:14 am
Forum: Investing - Theory, News & General
Topic: AQR: International Diversification—Still Not Crazy after All These Years
Replies: 295
Views: 18339

Re: AQR: International Diversification—Still Not Crazy after All These Years

That doesn't answer the question. I care about the future, not the past. Why is it crazy in one instance to only own stocks of 40 countries (international) but not crazy to only own stocks of 1 country (US)? I am assuming it hasn't paid off to-date. Would you rather be the owner of one successful store, or 40 unsuccessful stores? Diversification does not automatically equal free lunch, contrary to what many here believe. You are taking on all the political, societal, geographic, and currency risk of 40 countries, and, no, those risk do not necessarily counterbalance out. I can see the merits of owning US only, and I can see the merits of owning US and ex-US together; but only owning ex-US seems is being contrarian for the sake of being con...
by asif408
Tue May 09, 2023 9:18 am
Forum: Investing - Theory, News & General
Topic: AQR: International Diversification—Still Not Crazy after All These Years
Replies: 295
Views: 18339

Re: AQR: International Diversification—Still Not Crazy after All These Years

Of course it isn´t crazy to hold ex-US stocks. It is also not crazy to not hold ex-US stocks. Both are fine choices if you stick with boglehead principles. The results will still vary a lot, or not. Just a pick a strategy and accept that nobody knows what will happen. We could be brothers! I say that all the time on these stupid USA versus international threads. Both are perfectly reasonable ideas and both have legitimate arguments behind them. At some point, though you just have to choose. There are adherence of each, but cannot except that the other is a legitimate option. It seems to me there are, much more adamant people in the international camp as compared to the USA camp to which I looking at to religion or a church. Reasonable argu...
by asif408
Tue May 09, 2023 8:51 am
Forum: Investing - Theory, News & General
Topic: AQR: International Diversification—Still Not Crazy after All These Years
Replies: 295
Views: 18339

Re: AQR: International Diversification—Still Not Crazy after All These Years

Why? Have the results paid off for you vs the S&P 500? That doesn't answer the question. I care about the future, not the past. Why is it crazy in one instance to only own stocks of 40 countries (international) but not crazy to only own stocks of 1 country (US)? I am assuming it hasn't paid off to-date. Would you rather be the owner of one successful store, or 40 unsuccessful stores? Diversification does not automatically equal free lunch, contrary to what many here believe. You are taking on all the political, societal, geographic, and currency risk of 40 countries, and, no, those risk do not necessarily counterbalance out. I can see the merits of owning US only, and I can see the merits of owning US and ex-US together; but only ownin...
by asif408
Tue May 09, 2023 8:17 am
Forum: Investing - Theory, News & General
Topic: AQR: International Diversification—Still Not Crazy after All These Years
Replies: 295
Views: 18339

Re: AQR: International Diversification—Still Not Crazy after All These Years

beezlebub wrote: Tue May 09, 2023 8:09 am
asif408 wrote: Tue May 09, 2023 8:03 am
rkhusky wrote: Tue May 09, 2023 8:00 am
asif408 wrote: Tue May 09, 2023 7:46 am
TheoLeo wrote: Tue May 09, 2023 2:30 am Of course it isn´t crazy to hold ex-US stocks. It is also not crazy to not hold ex-US stocks. Both are fine choices if you stick with boglehead principles.
Is it also not crazy to not hold US stocks? That's what I do.
That’s crazy.
Why?
Have the results paid off for you vs the S&P 500?
That doesn't answer the question. I care about the future, not the past.

Why is it crazy to only own stocks of ~40 countries (international) but not crazy to only own stocks of 1 country (US)?
by asif408
Tue May 09, 2023 8:03 am
Forum: Investing - Theory, News & General
Topic: AQR: International Diversification—Still Not Crazy after All These Years
Replies: 295
Views: 18339

Re: AQR: International Diversification—Still Not Crazy after All These Years

rkhusky wrote: Tue May 09, 2023 8:00 am
asif408 wrote: Tue May 09, 2023 7:46 am
TheoLeo wrote: Tue May 09, 2023 2:30 am Of course it isn´t crazy to hold ex-US stocks. It is also not crazy to not hold ex-US stocks. Both are fine choices if you stick with boglehead principles.
Is it also not crazy to not hold US stocks? That's what I do.
That’s crazy.
Why?