All-In VTSAX

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Hawaiishrimp
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All-In VTSAX

Post by Hawaiishrimp »

HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
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tibbitts
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Re: All-In VTSAX

Post by tibbitts »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
You can consolidate to a one-fund portfolio while still maintaining exposure to international equities, so that's not your motivation. You don't like international. Okay, you have permission to use VTSAX only. Or just dump equities altogether and go 100% TIPS - that would be okay too.
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Starchild
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Re: All-In VTSAX

Post by Starchild »

Funny, I was looking to get rid of IEMG and VEA as well, but just to switch to VGTSX instead. I def wanna keep some int'l. Good dividends too. If you sell your int'l, you're selling low now.
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Re: All-In VTSAX

Post by Hawaiishrimp »

Dividends are nice for Int'l, I'm still on the fence with this one. To be honest..
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Re: All-In VTSAX

Post by Kevin M »

Are you sure this isn't driven at least partially by recency bias, rather than just a desire to simplify?

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Re: All-In VTSAX

Post by youngpleb »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
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Re: All-In VTSAX

Post by averagedude »

I wonder how many people would consider dumping VTSAX and go all in international if the 10 year returns were reversed?
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Re: All-In VTSAX

Post by drk »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm IEMG and VEA
Starchild wrote: Sun Jul 15, 2018 2:44 pm IEMG and VEA
You two realize that holding IEMG and VEA doubles your exposure to South Korea, right? If you're going to slice up international funds, be sure to get complementary ones.
Starchild wrote: Sun Jul 15, 2018 2:44 pm just to switch to VGTSX instead.
This is a good plan and will resolve the issue.
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Re: All-In VTSAX

Post by Hawaiishrimp »

youngpleb wrote: Sun Jul 15, 2018 3:39 pm
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
Last edited by Hawaiishrimp on Sun Jul 15, 2018 3:59 pm, edited 1 time in total.
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Re: All-In VTSAX

Post by Hawaiishrimp »

averagedude wrote: Sun Jul 15, 2018 3:43 pm I wonder how many people would consider dumping VTSAX and go all in international if the 10 year returns were reversed?
Not gonna lie. It certainly affects my decision, be it big or small. We are just humans.
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Re: All-In VTSAX

Post by youngpleb »

Hawaiishrimp wrote: Sun Jul 15, 2018 3:57 pm
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
It's true that the majority of S&P 500 companies are multinational. They pull about half of their earnings from international markets, IIRC. There are many investors who have done very well just using VTSAX or even the S&P 500, and it's a tough choice for investors to make. I have the same AA as you, and even though international may not perform as well, I appreciate the diversification it brings (as well as the several thousand companies that don't have a U.S. presence). From an ER standpoint, I think that is quickly becoming less of an issue as international fund ERs continue to drop. I'm not trying to convince you either way, and you should go with what will help you sleep at night. I do feel however that switching to 100% VTSAX at this time would be "buying high and selling low" so beware of that. Good luck :beer
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Re: All-In VTSAX

Post by tibbitts »

Hawaiishrimp wrote: Sun Jul 15, 2018 3:57 pm
youngpleb wrote: Sun Jul 15, 2018 3:39 pm
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
You know you aren't fully diversified by having VTSAX alone and you know that investing in U.S. businesses operating outside the U.S. isn't the equivalent to investing in foreign markets. You aren't really asking for "thoughts" when you proclaim "there's no need for Int'l" - you're making a statement and wanting people to agree.

I have access to a ACWI-exUS fund with a lower expense ratio than VTSAX. I'll bet if you did you still wouldn't invest in it. You know you're making a decision based on emotion and not logic, and are trying to justify it. Sometimes we all do that and this is certainly not the worst possible one.

If you look back in a decade and International has outperformed, what will you do?
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Re: All-In VTSAX

Post by lostdog »

If you only want simplicity just go with VTWSX or VT(Vanguard Total World). It sounds like you have recency bias and a crystal ball so all good with VTSAX.
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Re: All-In VTSAX

Post by Daedalus »

averagedude wrote: Sun Jul 15, 2018 3:43 pm I wonder how many people would consider dumping VTSAX and go all in international if the 10 year returns were reversed?
Good food for thought. I suppose many of us would do some hard thinking over that matter
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Re: All-In VTSAX

Post by Hawaiishrimp »

tibbitts wrote: Sun Jul 15, 2018 4:30 pm You aren't really asking for "thoughts" when you proclaim "there's no need for Int'l" - you're making a statement and wanting people to agree.
lostdog wrote: Sun Jul 15, 2018 4:38 pm If you only want simplicity just go with VTWSX or VT(Vanguard Total World). It sounds like you have recency bias and a crystal ball so all good with VTSAX.
It sounds like some BH members are less polite lately. What's up with that. :oops:
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Re: All-In VTSAX

Post by tibbitts »

Hawaiishrimp wrote: Sun Jul 15, 2018 5:54 pm
tibbitts wrote: Sun Jul 15, 2018 4:30 pm You aren't really asking for "thoughts" when you proclaim "there's no need for Int'l" - you're making a statement and wanting people to agree.
lostdog wrote: Sun Jul 15, 2018 4:38 pm If you only want simplicity just go with VTWSX or VT(Vanguard Total World). It sounds like you have recency bias and a crystal ball so all good with VTSAX.
It sounds like some BH members are less polite lately. What's up with that. :oops:
You have to expect that people are going to be critical when you claim to want people's thoughts and then proclaim that "there's no need for Int'l." You knew every advantage and disadvantage of international when you chose to invest a third of your equity allocation in international. Now, armed with the same information, you want to invest 100% in domestic equities. Do you not see why we would question that being a reasonable plan?
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Re: All-In VTSAX

Post by petulant »

Here's a paper on international exposure from Vanguard. It directly examines the idea that US-domiciled companies with global operations offer the equivalent of international stock ownership.

https://personal.vanguard.com/pdf/ISGGEB.pdf
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Re: All-In VTSAX

Post by averagedude »

petulant wrote: Sun Jul 15, 2018 6:09 pm Here's a paper on international exposure from Vanguard. It directly examines the idea that US-domiciled companies with global operations offer the equivalent of international stock ownership.

https://personal.vanguard.com/pdf/ISGGEB.pdf
That is an excellent paper from Vanguard. All DIY investors who find investing interesting should read this.
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Re: All-In VTSAX

Post by Hawaiishrimp »

tibbitts wrote: Sun Jul 15, 2018 6:07 pm
Hawaiishrimp wrote: Sun Jul 15, 2018 5:54 pm
tibbitts wrote: Sun Jul 15, 2018 4:30 pm You aren't really asking for "thoughts" when you proclaim "there's no need for Int'l" - you're making a statement and wanting people to agree.
lostdog wrote: Sun Jul 15, 2018 4:38 pm If you only want simplicity just go with VTWSX or VT(Vanguard Total World). It sounds like you have recency bias and a crystal ball so all good with VTSAX.
It sounds like some BH members are less polite lately. What's up with that. :oops:
You have to expect that people are going to be critical when you claim to want people's thoughts and then proclaim that "there's no need for Int'l." You knew every advantage and disadvantage of international when you chose to invest a third of your equity allocation in international. Now, armed with the same information, you want to invest 100% in domestic equities. Do you not see why we would question that being a reasonable plan?
No one's proclaiming anything. It's a conversation. I don't see a point to add "I think" in front of everything. Anyway, thanks for your time. Please don't bother replying to me. I don't need rudeness in a Sunday afternoon.

I am sorry; I just didn't expect my favorite Boglehead board come down to this.
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Re: All-In VTSAX

Post by Sandtrap »

Hawaiishrimp wrote: Sun Jul 15, 2018 3:57 pm
youngpleb wrote: Sun Jul 15, 2018 3:39 pm
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
I suspect there are a large percentage of folks, including myself, that would agree with your simplification and reasoning behind it. However, I think that 10 -20 years from now, either path you take would not have a huge difference in ending value and overall returns. Over time, each would rise and fall and average out. For example: look at the Vanguard Target Date funds, and "Fund of Funds (life strategy), with their diversification to international. Certainly not a bad approach and very well thought out by intelligent minds.

The "selling" point for me is the lower expense ratio of VTSAX. And, as Jack Bogle says, the only thing we really can control is lowering costs.

Though. . . my crystal ball has tasty Hawaiian "Poi" in it so is not entirely clear.

Thanks for posting an interesting topic. It is a popular one.
aloha
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Longtermgrowth
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Re: All-In VTSAX

Post by Longtermgrowth »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
Staying the course is very important, but as someone else pointed out, you are overweight South Korea holding those two funds.
Why not simplify by holding a Total International fund if your Emerging Markets percentage is roughly what those funds hold? At the least, switching IEMG to VWO would take care of the overlap between VEA and IEMG.
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Re: All-In VTSAX

Post by pkcrafter »

Hawaiianshrimp:
Current AA: 67% US, 33 % Int'l
How about dropping int'l to 20% and forgetting about it?

I suspect the comments you found annoying are focused on the behavioral aspects of your decision, but you did ask for feedback. In the end it's still your decision and there are many other decisions that are more important.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Re: All-In VTSAX

Post by asset_chaos »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!
You've got to have a portfolio you can stick with and rebalance to through thick or thin, so you'll have to get to know yourself better to make this decision.

Were you invested through the dot-com run up and crash around 2000? I ask because I remember so vividly the large number of articles and expressions during the run up saying loudly and clearly that the only investment anyone should ever bother with is large American growth stocks. Nothing else was worth investment. I thought then and I think now that diversification and low cost are perhaps your only true investing friends. (Vanguard, I recall, was notable at the time for continuing to advocate diversification and moderation.)
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Re: All-In VTSAX

Post by Hawaiishrimp »

Sandtrap wrote: Sun Jul 15, 2018 6:58 pm
I suspect there are a large percentage of folks, including myself, that would agree with your simplification and reasoning behind it. However, I think that 10 -20 years from now, either path you take would not have a huge difference in ending value and overall returns. Over time, each would rise and fall and average out. For example: look at the Vanguard Target Date funds, and "Fund of Funds (life strategy), with their diversification to international. Certainly not a bad approach and very well thought out by intelligent minds.

The "selling" point for me is the lower expense ratio of VTSAX. And, as Jack Bogle says, the only thing we really can control is lowering costs.

Though. . . my crystal ball has tasty Hawaiian "Poi" in it so is not entirely clear.

Thanks for posting an interesting topic. It is a popular one.
aloha
j :D
Great point about not having a huge difference in ending value and overall returns. I will certainly keep that in mind. I am at a point where less is definitely more. Less of everything, investment assets classes included.
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Re: All-In VTSAX

Post by Hawaiishrimp »

Longtermgrowth wrote: Sun Jul 15, 2018 7:37 pm Staying the course is very important, but as someone else pointed out, you are overweight South Korea holding those two funds.
Why not simplify by holding a Total International fund if your Emerging Markets percentage is roughly what those funds hold? At the least, switching IEMG to VWO would take care of the overlap between VEA and IEMG.
Very very good point, I learned something from BH every day indeed. After deciding US only or US/Int'l, that will be the next thing to decide.. If I go with US/Int'l, next step is to shuffle the deck on that. Thank you .
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Re: All-In VTSAX

Post by Hawaiishrimp »

asset_chaos wrote: Sun Jul 15, 2018 7:49 pm You've got to have a portfolio you can stick with and rebalance to through thick or thin, so you'll have to get to know yourself better to make this decision.
Were you invested through the dot-com run up and crash around 2000? I ask because I remember so vividly the large number of articles and expressions during the run up saying loudly and clearly that the only investment anyone should ever bother with is large American growth stocks. Nothing else was worth investment. I thought then and I think now that diversification and low cost are perhaps your only true investing friends. (Vanguard, I recall, was notable at the time for continuing to advocate diversification and moderation.)
I didn't invest during 2000. Still in college.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
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Re: All-In VTSAX

Post by tibbitts »

Sandtrap wrote: Sun Jul 15, 2018 6:58 pm
Hawaiishrimp wrote: Sun Jul 15, 2018 3:57 pm
youngpleb wrote: Sun Jul 15, 2018 3:39 pm
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
I suspect there are a large percentage of folks, including myself, that would agree with your simplification and reasoning behind it. However, I think that 10 -20 years from now, either path you take would not have a huge difference in ending value and overall returns. Over time, each would rise and fall and average out. For example: look at the Vanguard Target Date funds, and "Fund of Funds (life strategy), with their diversification to international. Certainly not a bad approach and very well thought out by intelligent minds.

The "selling" point for me is the lower expense ratio of VTSAX. And, as Jack Bogle says, the only thing we really can control is lowering costs.

Though. . . my crystal ball has tasty Hawaiian "Poi" in it so is not entirely clear.

Thanks for posting an interesting topic. It is a popular one.
aloha
j :D
The aspect that I don't believe most or at least many Bogleheads would agree with is eliminating a significant international position, in the absence of additional/new/changed information - except the recent relative performance of domestic vs. international equities. Too many of us have had the experience of bailing on a reasonable plan due purely to "recency" - at what turned out to be exactly the wrong time. In this case I believe the only information that has changed is recent performance - the rest, whether it be expenses, holding an extra fund, or even Jack Bogle's position on international, was all previously-known information. For example I don't believe there have been any new academic studies suggesting that international exposure is less desirable than earlier studies had suggested. Such studies could of course appear in the future.

When starting out with investing, I believe you can make a case for domestic-only, even if not all of us would agree. It's the changing of a plan in the absence of new information that's the interesting aspect of this situation. I believe the same argument should apply if someone decided to bail on a domestic-only plan in the absence of new information.
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Re: All-In VTSAX

Post by ParamedicProf »

Hawaiishrimp

First of all, I will always try to answer in a nice manner and secondly I think it is a good idea. I am of the camp that if the US crashes so does everyone else. We can't control the crash stuff but we can darn sure control the cost.
So I am with you 100%.
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Re: All-In VTSAX

Post by Gadget »

All these posts make me want to increase my international allocation to market weight instead of 30 percent. If everyone wants to market time in one direction based on recency bias, I figure the opposite is the way to go. Although I will likely just stay the course and it won't make much difference either way.
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Re: All-In VTSAX

Post by Hawaiishrimp »

Gadget wrote: Mon Jul 16, 2018 9:16 am All these posts make me want to increase my international allocation to market weight instead of 30 percent. If everyone wants to market time in one direction based on recency bias, I figure the opposite is the way to go. Although I will likely just stay the course and it won't make much difference either way.
Why you keep saying I have recency bias? Can't we have a logical discussion without labelling people? A VTSAX only portfolio have capable more international diversification than you think.


https://finance.yahoo.com/news/youll-ba ... 34837.html
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Re: All-In VTSAX

Post by ruralavalon »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
I believe that most Bogleheads would advise some investment in international stocks. But some prefer 100% of stocks in U.S. stocks.

The range of Bogleheads suggestions is all the way from 00% of stocks in international stocks to 50% of stocks in international stocks.

Please use the Google search box to search for discussions of international stock allocation.

I usually suggest around 20-30% of stocks in international stocks.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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Re: All-In VTSAX

Post by qwertyjazz »

Hawaiishrimp wrote: Mon Jul 16, 2018 10:39 am
Gadget wrote: Mon Jul 16, 2018 9:16 am All these posts make me want to increase my international allocation to market weight instead of 30 percent. If everyone wants to market time in one direction based on recency bias, I figure the opposite is the way to go. Although I will likely just stay the course and it won't make much difference either way.
Why you keep saying I have recency bias? Can't we have a logical discussion without labelling people? A VTSAX only portfolio have capable more international diversification than you think.


https://finance.yahoo.com/news/youll-ba ... 34837.html
"A U.S. portfolio is an international portfolio, no matter what anyone else says"-Jack Bogle.
It might be helpful to write your logic of why you chose international and EM in the first place. Of course, no one knows your true motivations and thoughts. But unfortunately the best advice is stay the course given it is rare to be able to time the market or not react as humans who include heuristics.
So why did you choose to have international before? What changed your mind about them? Is it worthwhile to build in behavioral safe guards to stay away from international for the next 20 years? We are all human and investing logic is not what we are built to deal with IMO
G.E. Box "All models are wrong, but some are useful."
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Re: All-In VTSAX

Post by Sandtrap »

tibbitts wrote: Sun Jul 15, 2018 8:43 pm
Sandtrap wrote: Sun Jul 15, 2018 6:58 pm
Hawaiishrimp wrote: Sun Jul 15, 2018 3:57 pm
youngpleb wrote: Sun Jul 15, 2018 3:39 pm
What is the reasoning behind this? Do you feel that VTSAX will outperform international stocks going forward? I'd say (ironically enough) that getting rid of EM and developed international stocks is acceptable from a Jack Bogle standpoint, but not really from a Bogleheads standpoint, since you are losing out on diversification. What are your current asset allocations?
Current AA: 67% US, 33 % Int'l

Reasoning: Not so much about current performance of Int'l. I think in the long term, US will either performance better or equally as good as Int'l. Either way, there's no need for Int'l. All the big caps in VTSAX already have businesses outside of US. By having VTSAX alone, it's already diversified. That's my current viewpoint. Also, Expense Ratio is cheaper with VTSAX. Thoughts?
I suspect there are a large percentage of folks, including myself, that would agree with your simplification and reasoning behind it. However, I think that 10 -20 years from now, either path you take would not have a huge difference in ending value and overall returns. Over time, each would rise and fall and average out. For example: look at the Vanguard Target Date funds, and "Fund of Funds (life strategy), with their diversification to international. Certainly not a bad approach and very well thought out by intelligent minds.

The "selling" point for me is the lower expense ratio of VTSAX. And, as Jack Bogle says, the only thing we really can control is lowering costs.

Though. . . my crystal ball has tasty Hawaiian "Poi" in it so is not entirely clear.

Thanks for posting an interesting topic. It is a popular one.
aloha
j :D
The aspect that I don't believe most or at least many Bogleheads would agree with is eliminating a significant international position, in the absence of additional/new/changed information - except the recent relative performance of domestic vs. international equities. Too many of us have had the experience of bailing on a reasonable plan due purely to "recency" - at what turned out to be exactly the wrong time. In this case I believe the only information that has changed is recent performance - the rest, whether it be expenses, holding an extra fund, or even Jack Bogle's position on international, was all previously-known information. For example I don't believe there have been any new academic studies suggesting that international exposure is less desirable than earlier studies had suggested. Such studies could of course appear in the future.

When starting out with investing, I believe you can make a case for domestic-only, even if not all of us would agree. It's the changing of a plan in the absence of new information that's the interesting aspect of this situation. I believe the same argument should apply if someone decided to bail on a domestic-only plan in the absence of new information.
Absolutely correct!
Market timing or reactionary actions is a big "no" in the "behavioral pitfalls" Wiki.
j
Wiki Bogleheads Wiki: Everything You Need to Know
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TimeRunner
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Re: All-In VTSAX

Post by TimeRunner »

I'm reminded of Ray Dalio's quote: "He who lives by the crystal ball will eat shattered glass."
https://en.wikipedia.org/wiki/Ray_Dalio

More on topic, take a look at VT ETF (Vanguard Total World) if you want to simplify and be more hands-off. https://investor.vanguard.com/etf/profile/VT
One cannot enlighten the unconscious. | "All I need are some tasty waves, a cool buzz, and I'm fine." -Jeff Spicoli
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Kevin M
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Re: All-In VTSAX

Post by Kevin M »

Hawaiishrimp wrote: Mon Jul 16, 2018 10:39 am
Gadget wrote: Mon Jul 16, 2018 9:16 am All these posts make me want to increase my international allocation to market weight instead of 30 percent. If everyone wants to market time in one direction based on recency bias, I figure the opposite is the way to go. Although I will likely just stay the course and it won't make much difference either way.
Why you keep saying I have recency bias? Can't we have a logical discussion without labelling people?
Raising the concern about recency bias is reasonable, given that you're considering eliminating your international fund holdings after a period when international has underperformed US, and emerging markets has underperformed developed markets. It probably would not have been raised if the situation was the opposite. So I think it is part of a logical discussion.

It's not a matter of labeling you as a person, but of questioning how much recency bias might be affecting your behavior or decision making. Note that I asked this as a question, not as an accusation or even a declaration, early in the thread: viewtopic.php?p=4021816#p4021374.

There are thousands of pages of forum discussion about whether or not one should hold international stocks in their portfolio, and there is no definitive answer. I'd say the majority of Bogleheads probably own some international stocks, but there certainly are many who do not. I don't think we're going to cover any new ground here, or convince anyone in one camp to join the other camp--but of course I could be wrong.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
H-Town
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Re: All-In VTSAX

Post by H-Town »

Hawaiishrimp wrote: Sun Jul 15, 2018 2:20 pm HI BH friends,

Thinking about getting rid of IEMG and VEA and all-in VTSAX. This is for retirement fund. I am asking for advice if getting rid of emerging market and international are acceptable from boglehead investment style? i.e, I am trying to consolidate more and more into 2 Fund portfolio. Thanks!

Thanks!
This is why the biggest enemy is your thyself when it comes to investing. If you want to sell low, by all means. Just don't come back and buy high when VEA and IEMG outperform U.S. stocks.

Put all your money into targeted date fund and work on making more money and/or saving more. That'll be more productive in increasing your net worth.
Time is the ultimate currency.
Kencsp
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Re: All-In VTSAX

Post by Kencsp »

Personally I see great value in China growth over the next few decades so I’m invested in it. I believe China growth potential outweighs the us potential.

If I invested using your logic I’d be in 100% China. Seems scary? If so then diversify. Determine the percentage of us fund u have complete faith in added to what your comfortable gambling in (like me and China).
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Cyclesafe
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Re: All-In VTSAX

Post by Cyclesafe »

All true above, but some of the disparity with international has been due to the recent strengthening of the dollar. Unhedged international investing helps ameliorate when the US starts printing dollars to fund deficits.

Another factor is US company share buy backs due to the new corporate tax rate.

IMHO, a long term investor takes a big chance in assuming that US economic dominance will continue forever and that the US will always be the best place to invest.
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)
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