stemikger wrote:freebeer wrote:Grt2bOutdoors wrote:onourway wrote:The only potential issue I see with the Balanced Index fund is lack of international exposure.
That has been a net benefit to those who did not partake in the lower international returns.
Someone who had held 100% AAPL for the last two years would also have seen a net benefit over holding SP500 but that doesn't mean that it would have been an optimal investment decision. Bogleheads principle is diversification aka to "own the market". Diversification implies that if you are less diversified and happen to hold an asset class that does better than the market you will be rewarded but that doesn't mean you were wise to do so it means you were lucky. Similarly it does look smart to have held US only these last couple of years but that doesn't mean it's an optimal plan for the future (is it a "good enough" plan? probably yes but that's a different question).
Can't disagree with what you said, but as for me. I read Common Sense on Mutual Funds and the chapter on International Investing just made so much sense, I don't think I could ever invest in international. I really do feel like I already have built in international diversification in my all U.S. index fund because of all the multinationals. However, that is not the only reason, I'm confident the U.S. is the safest place a person can invest and will remain that way throughout my lifetime. It was never an issue if international did better, like you said I just got lucky. The only thing I can confidently say as an investor who is saving for retirement is, if international starts doing better than the U.S. I still will stick with my all U.S. Index portfolio. I don't think I can confidently say I will always be 60/40 stocks bonds or any other allocation, but I can be confident about an all U.S. portfolio.
I read that too. But I am still wrestling with this. Every other author I like says International is crucial. And they say Bogle and Buffett are being biased because they made all of their money here.