Why international?

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dmcmahon
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Re: Why international?

Post by dmcmahon »

abuss368 wrote: Fri Apr 24, 2020 3:29 pm
Nate7out wrote: Fri Apr 24, 2020 2:04 pm
abuss368 wrote: Fri Apr 24, 2020 12:59 pm
TonyDAntonio wrote: Fri Apr 24, 2020 12:16 pm Why? I ask myself this question everyday for the last 13 years, when I got 'smart' about investing. I also ask, "Why REITs?", "Why Small Cap value?".
Do you invest in the S&P 500 only?
No, he has intl, reit, scv and regrets it.
Regrets it from the standpoint that it has been a decade of excellent S&P 500 performance?
Can't speak for Tony, but I feel his pain in my wallet, at least vis-a-vis international. I don't have to look at SPY or any other index. Just in absolute terms it's been a terrible investment. My mom has done better in a savings account.

Since inception 9 years ago VXUS has had a total return of 10%. If you were buying it on January 1, 2011, you paid $50/share. Since inception in 2007, VEA has had a total return of -2%. So yes, those have both been terrible investments. If it were to simply regain its pre-crash price of around $44, a hard-to-believe 25% rebound from here, that would give you a 10-year return of a whopping 2% annualized. In other words, an incredible rebound we're unlikely to see would be needed just to get it competitive with my mom's savings account!

This thread is about international, but since Tony mentioned small-cap value, VBR has had a total return of 80% over 10 years and 145% since inception in 2004. All of those gains were in the past, it's lost 10% over 5 years. VNQ (REITs) has had a total return of over 180% since inception in 2004, is up 113% in 10 years, and a paltry 2% over 5 years. So another case where the gains were in the past, but still not awful.
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abuss368
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Re: Why international?

Post by abuss368 »

dmcmahon wrote: Fri Apr 24, 2020 3:48 pm
abuss368 wrote: Fri Apr 24, 2020 3:29 pm
Nate7out wrote: Fri Apr 24, 2020 2:04 pm
abuss368 wrote: Fri Apr 24, 2020 12:59 pm
TonyDAntonio wrote: Fri Apr 24, 2020 12:16 pm Why? I ask myself this question everyday for the last 13 years, when I got 'smart' about investing. I also ask, "Why REITs?", "Why Small Cap value?".
Do you invest in the S&P 500 only?
No, he has intl, reit, scv and regrets it.
Regrets it from the standpoint that it has been a decade of excellent S&P 500 performance?
Can't speak for Tony, but I feel his pain in my wallet, at least vis-a-vis international. I don't have to look at SPY or any other index. Just in absolute terms it's been a terrible investment. My mom has done better in a savings account.

Since inception 9 years ago VXUS has had a total return of 10%. If you were buying it on January 1, 2011, you paid $50/share. Since inception in 2007, VEA has had a total return of -2%. So yes, those have both been terrible investments. If it were to simply regain its pre-crash price of around $44, a hard-to-believe 25% rebound from here, that would give you a 10-year return of a whopping 2% annualized. In other words, an incredible rebound we're unlikely to see would be needed just to get it competitive with my mom's savings account!

This thread is about international, but since Tony mentioned small-cap value, VBR has had a total return of 80% over 10 years and 145% since inception in 2004. All of those gains were in the past, it's lost 10% over 5 years. VNQ (REITs) has had a total return of over 180% since inception in 2004, is up 113% in 10 years, and a paltry 2% over 5 years. So another case where the gains were in the past, but still not awful.
I agree. Someone posted that International has had the return of Treasuries with a lot more volatility.
John C. Bogle: “Simplicity is the master key to financial success."
Rosencrantz1
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Re: Why international?

Post by Rosencrantz1 »

Stef wrote: Mon Apr 20, 2020 12:43 am
Ambitious994 wrote: Sun Apr 19, 2020 11:43 pm The Vanguard Total International Stock Fund from 1997 to current has returned a CAGR of 3.67%. From 2000 to current it did a CAGR of 2.20%. That is complete and utter poor performance for an equity holding. I have no idea why folks in The Investing Community recommend going International. The S&P 500 Index is all you need for an equity holding.
You know what Bogle said about past performance?

Anyway, I wonder if people with 100% US allocation would change their AA if they weren't Americans. Lets say you're from UK, Sweden, Switzerland, Australia or Japan. Would you still invest 100% in US stocks or maybe go with VT?
I'll bite. I've held (effectively) 100% US for the past 30+ years (with a tilt towards technology). I say 'effectively' because, in the past, I've held some mutual funds that had tiny exUS in them too. I buy equities specifically because of their 'past performance' - it's the reason I have any of my dollars in the stock markets at all. Having said this, when I look at US vs exUS performance over the past year, over the past 5 years, the past 10 years, the past 20 years, the past 50 years - it appears US has outperformed over those time frames. It's this past performance that guides my investment $$ into the US equity markets. I'm a US citizen and I can assure you that IF exUS had that kind of historical outperformance, that's where my dollars would be. Speaking for myself, it's simply a matter of 'follow the money'.

Of course, I realize exUS might outperform US over the next year or two or decade. For those dearly holding their exUS, I'm sure they hope that it does - exUS has a LOT of catching up to do (and, who knows, it might) :beer
TonyDAntonio
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Re: Why international?

Post by TonyDAntonio »

In 2007 I held large cap US in a 401k. My only investment. I may have had a bond fund I honestly don't know. In 2007 I got outsourced from one large company to another. I figured I better get smart about investing. I rolled the 401k into a Vanguard IRA and found the Merriman slice and dice portfolio. Well I sliced and diced and still do. I've invested enough to be retired but I'm pretty sure I've got a lot less than if I just stayed with US large cap. But I'm well diversified, so I got that going for me. 🙄
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dmcmahon
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Re: Why international?

Post by dmcmahon »

Rosencrantz1 wrote: Fri Apr 24, 2020 4:57 pm
Stef wrote: Mon Apr 20, 2020 12:43 am
Ambitious994 wrote: Sun Apr 19, 2020 11:43 pm The Vanguard Total International Stock Fund from 1997 to current has returned a CAGR of 3.67%. From 2000 to current it did a CAGR of 2.20%. That is complete and utter poor performance for an equity holding. I have no idea why folks in The Investing Community recommend going International. The S&P 500 Index is all you need for an equity holding.
You know what Bogle said about past performance?

Anyway, I wonder if people with 100% US allocation would change their AA if they weren't Americans. Lets say you're from UK, Sweden, Switzerland, Australia or Japan. Would you still invest 100% in US stocks or maybe go with VT?
I'll bite. I've held (effectively) 100% US for the past 30+ years (with a tilt towards technology). I say 'effectively' because, in the past, I've held some mutual funds that had tiny exUS in them too. I buy equities specifically because of their 'past performance' - it's the reason I have any of my dollars in the stock markets at all. Having said this, when I look at US vs exUS performance over the past year, over the past 5 years, the past 10 years, the past 20 years, the past 50 years - it appears US has outperformed over those time frames. It's this past performance that guides my investment $$ into the US equity markets. I'm a US citizen and I can assure you that IF exUS had that kind of historical outperformance, that's where my dollars would be. Speaking for myself, it's simply a matter of 'follow the money'.

Of course, I realize exUS might outperform US over the next year or two or decade. For those dearly holding their exUS, I'm sure they hope that it does - exUS has a LOT of catching up to do (and, who knows, it might) :beer
By the metrics, it looks like a bargain. Much lower average P/E and much better dividend yield. Currency changes are factor but not enough to account for the difference. It's as if overseas markets have died.
Alchemist
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Re: Why international?

Post by Alchemist »

Stef wrote: Mon Apr 20, 2020 5:06 am Is the international market that inefficient that it's constantly overvalued?
There is no 'international market'. There is no Global Stock Exchange where we can all buy Samsung, Honda, Volkswagen, and Siemens. There are dozens of individual national markets. Investing in an international index fund is actually an investment in many markets with different rules, regulations, currencies, market caps, geographies, and demographies.

I know it sounds like I am being pedantic, but it is an important point that gets lost in these conversations with discussion of U.S. vs International. Referring to things like 'the international market' obscures the level of complexity and risk involved in such an investment. Does not mean automatically that one should not make such an investment, but it is critical to think of these things as they actually are. Much like when describing past performance it is all too common for people to say such-and-such performs when really they can only say such-and-such performed, past tense.
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Re: Why international?

Post by l1am »

Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.

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visualguy
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Re: Why international?

Post by visualguy »

l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
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Re: Why international?

Post by KyleAAA »

visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
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Re: Why international?

Post by l1am »

visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
The anticipation of performance can be priced into the overall index (P/E CAPE ratios). I'm still overweight US: 80%. I've been debating dropping the 20% INTL, but currently leaning towards maintaining it.

In the 2000's lots of new US tech companies emerged, but US still lagged a global portfolio.
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Re: Why international?

Post by visualguy »

KyleAAA wrote: Sat Apr 25, 2020 2:10 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
Can you effectively invest in this interesting stuff that's happening overseas? What is it and how do you invest in it? Lots of stuff happening in China, but it's a different world in terms of investment.
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ruralavalon
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Re: Why international?

Post by ruralavalon »

visualguy wrote: Sat Apr 25, 2020 2:24 pm
KyleAAA wrote: Sat Apr 25, 2020 2:10 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
Can you effectively invest in this interesting stuff that's happening overseas? What is it and how do you invest in it? Lots of stuff happening in China, but it's a different world in terms of investment.
There is always "interesting stuff happening overseas".

You can effectively invest overseas by using very diversified, low cost index funds like --
Vanguard Total International Stock Index Fund (VTIAX), or
Vanguard Developed Markets Index Fund (VTMGX), or
Vanguard European Index Fund (VEUSX), and
others.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
visualguy
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Re: Why international?

Post by visualguy »

ruralavalon wrote: Sat Apr 25, 2020 2:28 pm
visualguy wrote: Sat Apr 25, 2020 2:24 pm
KyleAAA wrote: Sat Apr 25, 2020 2:10 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
Can you effectively invest in this interesting stuff that's happening overseas? What is it and how do you invest in it? Lots of stuff happening in China, but it's a different world in terms of investment.
There is always "interesting stuff happening overseas".

You can effectively invest overseas by using very diversified, low cost index funds like --
Vanguard Total International Stock Index Fund (VTIAX), or
Vanguard Developed Markets Index Fund (VTMGX), or
Vanguard European Index Fund (VEUSX), and
others.
How is that effective if all that "interesting stuff happening overseas" didn't translate to at least acceptable performance for these investments? Either there isn't so much interesting stuff there (or it's not profitable interesting stuff), or this investment vehicle isn't effective. You can't have it both ways.
visualguy
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Re: Why international?

Post by visualguy »

l1am wrote: Sat Apr 25, 2020 2:15 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
The anticipation of performance can be priced into the overall index (P/E CAPE ratios). I'm still overweight US: 80%. I've been debating dropping the 20% INTL, but currently leaning towards maintaining it.

In the 2000's lots of new US tech companies emerged, but US still lagged a global portfolio.
The US was way ahead of a global portfolio even then unless you just measured a few years. As to the emerging companies - yes, it takes a while for companies to get to a market cap of hundreds of billions, but the point is that this has been happening in the US. When did we last see this happen in Europe/Japan? They've been stagnant for literally decades in terms of generating new major companies, unfortunately.
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ruralavalon
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Re: Why international?

Post by ruralavalon »

visualguy wrote: Sat Apr 25, 2020 2:35 pm
ruralavalon wrote: Sat Apr 25, 2020 2:28 pm
visualguy wrote: Sat Apr 25, 2020 2:24 pm
KyleAAA wrote: Sat Apr 25, 2020 2:10 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm

New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
Can you effectively invest in this interesting stuff that's happening overseas? What is it and how do you invest in it? Lots of stuff happening in China, but it's a different world in terms of investment.
There is always "interesting stuff happening overseas".

You can effectively invest overseas by using very diversified, low cost index funds like --
Vanguard Total International Stock Index Fund (VTIAX), or
Vanguard Developed Markets Index Fund (VTMGX), or
Vanguard European Index Fund (VEUSX), and
others.
How is that effective if all that "interesting stuff happening overseas" didn't translate to at least acceptable performance for these investments? Either there isn't so much interesting stuff there (or it's not profitable interesting stuff), or this investment vehicle isn't effective. You can't have it both ways.
So that's what you meant by "effectively ".

Overseas it's not really possible to invest only in the stuff which will perform well :( .

Of course that's not possible in the U.S. either :( .

There is iShares Global Tech ETF (IXN). BlackRock IShares also have country specific ETFs. Also see: "5 ETFs to buy for the future of technology" .
Last edited by ruralavalon on Sat Apr 25, 2020 2:52 pm, edited 1 time in total.
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visualguy
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Re: Why international?

Post by visualguy »

ruralavalon wrote: Sat Apr 25, 2020 2:41 pm So that's what you meant by "effectively ".

Overseas it's not really possible to invest only in the stuff which will perform well :( .

Of course that's not possible in the U.S. either :( .
Here's what I mean... In the US, "interesting stuff is happening", and I gain as an investor in the stock market index. In ex-US, you claim that there's all this "interesting stuff" that's also happening, but I don't gain from indexing the ex-US stock market. Hence, something is broken. Either there isn't actually so much "interesting stuff" happening there, or indexing their stock markets isn't an effective way to benefit from it. In the case of China and India, I think it's the latter. In the case of Europe/Japan, I think it's the former, but regardless, it has not been an effective way to get a good return on investment, which is our goal.
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ruralavalon
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Re: Why international?

Post by ruralavalon »

visualguy wrote: Sat Apr 25, 2020 2:48 pm
ruralavalon wrote: Sat Apr 25, 2020 2:41 pm So that's what you meant by "effectively ".

Overseas it's not really possible to invest only in the stuff which will perform well :( .

Of course that's not possible in the U.S. either :( .
Here's what I mean... In the US, "interesting stuff is happening", and I gain as an investor in the stock market index. In ex-US, you claim that there's all this "interesting stuff" that's also happening, but I don't gain from indexing the ex-US stock market. Hence, something is broken. Either there isn't actually so much "interesting stuff" happening there, or indexing their stock markets isn't an effective way to benefit from it. In the case of China and India, I think it's the latter. In the case of Europe/Japan, I think it's the former, but regardless, it has not been an effective way to get a good return on investment, which is our goal.
Added this while you were posting.

There is iShares Global Tech ETF (IXN). BlackRock IShares also have country specific ETFs. Also see: "5 ETFs to buy for the future of technology" .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
visualguy
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Re: Why international?

Post by visualguy »

ruralavalon wrote: Sat Apr 25, 2020 2:55 pm Added this while you were posting.

There is iShares Global Tech ETF (IXN). BlackRock IShares also have country specific ETFs. Also see: "5 ETFs to buy for the future of technology" .
The country-specific ETFs haven't done well either... Look at China and India - the returns on their country ETFs have been lousy even though their economies have grown tremendously. IXN is actually dominated by US companies, so not sure how that's a solution... Regardless, you're basically also saying that you have to look elsewhere, not ex-US indexing.
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Re: Why international?

Post by dmcmahon »

After reading some of the historical data, I’m going to give up and cash out of the 401k position. I’m not one to push a losing hand by anchoring to old valuations. I’d say that surely means the bottom’s in, but alas for my fellow investors I’ll still have the taxable position. At least it will cease to be a black hole for any future savings. The most I can lose is whatever remains. If it withers to below 5% of my portfolio I’ll have to consider liquidating it as it’ll then be too small to be worth the bother.
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Re: Why international?

Post by dmcmahon »

visualguy wrote: Sat Apr 25, 2020 2:40 pm
l1am wrote: Sat Apr 25, 2020 2:15 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
The anticipation of performance can be priced into the overall index (P/E CAPE ratios). I'm still overweight US: 80%. I've been debating dropping the 20% INTL, but currently leaning towards maintaining it.

In the 2000's lots of new US tech companies emerged, but US still lagged a global portfolio.
The US was way ahead of a global portfolio even then unless you just measured a few years. As to the emerging companies - yes, it takes a while for companies to get to a market cap of hundreds of billions, but the point is that this has been happening in the US. When did we last see this happen in Europe/Japan? They've been stagnant for literally decades in terms of generating new major companies, unfortunately.
Are new companies required to get a return? I guess when I bought the international fund a decade ago I thought I’d get a mix of global businesses that don’t appear to be materially worse than their American counterparts. Unilever, Nestle, Roche, Novartis, Glaxo, Astra-Zeneca, Samsung, Shell, Toyota, Airbus, the list goes on and on. They can’t all be large banks creamed by negative interest rates. Is it too much to expect a positive return, even lagging the US, after 10 years?
visualguy
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Re: Why international?

Post by visualguy »

dmcmahon wrote: Sat Apr 25, 2020 4:58 pm
visualguy wrote: Sat Apr 25, 2020 2:40 pm
l1am wrote: Sat Apr 25, 2020 2:15 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
The anticipation of performance can be priced into the overall index (P/E CAPE ratios). I'm still overweight US: 80%. I've been debating dropping the 20% INTL, but currently leaning towards maintaining it.

In the 2000's lots of new US tech companies emerged, but US still lagged a global portfolio.
The US was way ahead of a global portfolio even then unless you just measured a few years. As to the emerging companies - yes, it takes a while for companies to get to a market cap of hundreds of billions, but the point is that this has been happening in the US. When did we last see this happen in Europe/Japan? They've been stagnant for literally decades in terms of generating new major companies, unfortunately.
Are new companies required to get a return? I guess when I bought the international fund a decade ago I thought I’d get a mix of global businesses that don’t appear to be materially worse than their American counterparts. Unilever, Nestle, Roche, Novartis, Glaxo, Astra-Zeneca, Samsung, Shell, Toyota, Airbus, the list goes on and on. They can’t all be large banks creamed by negative interest rates. Is it too much to expect a positive return, even lagging the US, after 10 years?
New major companies aren't required, but they certainly help get a larger return, and I mentioned that aspect partially as a response to the "priced in" argument since I don't see how this could be truly priced in.

The companies you mentioned are good companies, but you are extrapolating from the US even though these companies aren't US companies. This means different corporate management cultures (less obsession with shareholders), different corporate structures (like Chaebols in S.Korea), different taxation, different buyback policies, different levels of government support, different currencies, etc. Having said that - I would have also expected a better return from ex-US than what we've seen. I expected it to lag US significantly, but didn't expect it to do quite as poorly as it has done.
l1am
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Re: Why international?

Post by l1am »

visualguy wrote: Sat Apr 25, 2020 2:40 pm
l1am wrote: Sat Apr 25, 2020 2:15 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
The anticipation of performance can be priced into the overall index (P/E CAPE ratios). I'm still overweight US: 80%. I've been debating dropping the 20% INTL, but currently leaning towards maintaining it.

In the 2000's lots of new US tech companies emerged, but US still lagged a global portfolio.
The US was way ahead of a global portfolio even then unless you just measured a few years. As to the emerging companies - yes, it takes a while for companies to get to a market cap of hundreds of billions, but the point is that this has been happening in the US. When did we last see this happen in Europe/Japan? They've been stagnant for literally decades in terms of generating new major companies, unfortunately.
If you look at the charts I posted, you’ll see the US lagged global in 8 of 12 decades. Performance since 2009 has been exceptionally strong for US.

My point is that you have to assume the market is underpricing US relative to ex-US in terms of expected performance.

If you believe the US is indeed relatively underpriced, even given the higher PE/CAPE valuations, then yes you should bet on US.

I’m not as confident as you are in terms of knowledge that this isn’t priced into the overall market valuations. CAPE seems like a semi-decent indicator over 20 year horizons, although I’m not basing heavily on indicators.
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Re: Why international?

Post by KyleAAA »

visualguy wrote: Sat Apr 25, 2020 2:24 pm
KyleAAA wrote: Sat Apr 25, 2020 2:10 pm
visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
I don't think tech/AI necessarily leans US. Lots of interesting stuff happening overseas that could easily become the next Amazon.
Can you effectively invest in this interesting stuff that's happening overseas? What is it and how do you invest in it? Lots of stuff happening in China, but it's a different world in terms of investment.
Yeah, lots of public tech companies to invest in.
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Re: Why international?

Post by visualguy »

l1am wrote: Sat Apr 25, 2020 6:01 pm If you look at the charts I posted, you’ll see the US lagged global in 8 of 12 decades. Performance since 2009 has been exceptionally strong for US.
You're ignoring the magnitude of the out-performance/under-performance over an investment lifetime. You seem to be counting years instead of counting money...

Regarding the other point - US out-performed significantly even if you ignore the last decade (and there's no valid reason to ignore it). Take a look at the Credit Swiss Global Investment Yearbook from a decade ago.
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Re: Why international?

Post by Rosencrantz1 »

visualguy wrote: Sat Apr 25, 2020 1:46 pm
l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.
New companies aren't priced in. For example, how could Tesla have been priced in before it existed? The emergence of new major companies on the stock market is something we see much more of in the US than ex-US. You're saying you're bullish on tech/AI which leans US. Is there anything you're bullish about in Europe/Japan which is most of ex-US? Maybe there's your answer. I can see being bullish on the Chinese economy and maybe the Indian economy, but being bullish on indexing their stock markets is a somewhat different matter.
Excellent point. And one I hadn't really thought about previously.
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Re: Why international?

Post by bgf »

l1am wrote: Sat Apr 25, 2020 12:59 pm Another interesting chart, once again - is there good reason to believe the US will continue to outperform? There's certainly a part of me that is bullish on tech/AI going forward which would lean US. But then again, that's market timing and assuming it isn't already priced in.

Image
Image
Wow great chart. Here we are arguing over US v International when all you need to do is just pick the right birth year. Easy peasy
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
l1am
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Re: Why international?

Post by l1am »

visualguy wrote: Sat Apr 25, 2020 6:29 pm You're ignoring the magnitude of the out-performance/under-performance over an investment lifetime. You seem to be counting years instead of counting money...

Regarding the other point - US out-performed significantly even if you ignore the last decade (and there's no valid reason to ignore it). Take a look at the Credit Swiss Global Investment Yearbook from a decade ago.
Fair point, I guess I'm just acknowledging that US can, and has, under-performed relative to global over long periods of time. I have ~3 decades to retirement, and global diversification hedges some risk. It'll be interesting to see what happens regardless, I'm still 70-80% US.
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Re: Why international?

Post by FrankTheViking »

New investor here, started Jan 1st 2020. I believe U.S. will outperform / perform good enough on it's own going forward in my lifetime. That being said, couldn't sleep well at 100% U.S. Ended up going 80/20 U.S. / INTL. Sleep like a baby now. Wife and I are 100% equities.
No EF. 80% Total U.S. / 20% Total International. 100% equity. Is there a gun to your head? Is there a tiger in the room? No? What's the problem?
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stocknoob4111
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Re: Why international?

Post by stocknoob4111 »

The decade chart seems to imply that International had positive returns in the 2010s.. backtesting VTIAX the results are not good, rather they are actually HORRIFIC. International has performed so bad in the 2010s it is just shocking, there is no other way to put it :shock:

Jan 2011 (inception) - March 2020: Real CAGR is (-0.55%)

In the same time period VFIAX (S&P 500) returned 10.34% annualized.

https://tinyurl.com/y9k6r7l3

No asset class should've returned a NEGATIVE REAL return in what was considered to be one of the most robust economic periods in recent history. Now, yes, it does include the drop of March 2020, but even so the cumulative returns all through the decade should've held up to be reasonably positive.

Does anyone seriously believe that in the decade ahead VTIAX is not only going to outperform but rather make up for all it's shortfall in the 2010s? If that is the case VTIAX would have to return 15-16% annualized consistently over the next decade. Not only am I skeptical that will happen I am increasingly starting to think that International will underperform US again in this new decade.

Fidelity, Schwab, Vanguard all scream how "cheap" international is but as Bogle himself said and I am starting to think Bogle knew what he was saying - "It's cheap for a reason!"

It's cheap because it's non performing junk!
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Re: Why international?

Post by dmcmahon »

stocknoob4111 wrote: Sun Apr 26, 2020 6:20 pm The decade chart seems to imply that International had positive returns in the 2010s.. backtesting VTIAX the results are not good, rather they are actually HORRIFIC. International has performed so bad in the 2010s it is just shocking, there is no other way to put it :shock:

Jan 2011 (inception) - March 2020: Real CAGR is (-0.55%)

In the same time period VFIAX (S&P 500) returned 10.34% annualized.

Does anyone seriously believe that in the decade ahead VTIAX is not only going to outperform but rather make up for all it's shortfall in the 2010s? If that is the case VTIAX would have to return 15-16% annualized consistently over the next decade. Not only am I skeptical that will happen I am increasingly starting to think that International will underperform US again in this new decade.

Fidelity, Schwab, Vanguard all scream how "cheap" international is but as Bogle himself said and I am starting to think Bogle knew what he was saying - "It's cheap for a reason!"

It's cheap because it's non performing junk!
I’ve reluctantly come to this conclusion. Time to walk this dog. It’s not that it’s underperformed the US, it’s underperformed a stack of greenbacks stuffed into a mattress. Someone is benefiting from the economic activity of these foreign companies but it’s not their shareholders.
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Re: Why international?

Post by abuss368 »

dmcmahon wrote: Sun Apr 26, 2020 6:26 pm
stocknoob4111 wrote: Sun Apr 26, 2020 6:20 pm The decade chart seems to imply that International had positive returns in the 2010s.. backtesting VTIAX the results are not good, rather they are actually HORRIFIC. International has performed so bad in the 2010s it is just shocking, there is no other way to put it :shock:

Jan 2011 (inception) - March 2020: Real CAGR is (-0.55%)

In the same time period VFIAX (S&P 500) returned 10.34% annualized.

Does anyone seriously believe that in the decade ahead VTIAX is not only going to outperform but rather make up for all it's shortfall in the 2010s? If that is the case VTIAX would have to return 15-16% annualized consistently over the next decade. Not only am I skeptical that will happen I am increasingly starting to think that International will underperform US again in this new decade.

Fidelity, Schwab, Vanguard all scream how "cheap" international is but as Bogle himself said and I am starting to think Bogle knew what he was saying - "It's cheap for a reason!"

It's cheap because it's non performing junk!
I’ve reluctantly come to this conclusion. Time to walk this dog. It’s not that it’s underperformed the US, it’s underperformed a stack of greenbacks stuffed into a mattress. Someone is benefiting from the economic activity of these foreign companies but it’s not their shareholders.
Your last sentence speaks to me. I have been thinking about that for a while now.
John C. Bogle: “Simplicity is the master key to financial success."
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dmcmahon
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Re: Why international?

Post by dmcmahon »

abuss368 wrote: Sun Apr 26, 2020 8:17 pm
dmcmahon wrote: Sun Apr 26, 2020 6:26 pm I’ve reluctantly come to this conclusion. Time to walk this dog. It’s not that it’s underperformed the US, it’s underperformed a stack of greenbacks stuffed into a mattress. Someone is benefiting from the economic activity of these foreign companies but it’s not their shareholders.
Your last sentence speaks to me. I have been thinking about that for a while now.
Well good news, the bottom is in! Because I just sold out the entire position everywhere that it was possible to do so without taking a wash sale loss. This drops my AA from 60/40 to 50/50. I could just leave it there, or redeploy the 10% I just liquidated to US equities.
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Re: Why international?

Post by wesgreen »

Good luck! Nobody can know when the bottom is here, and it doesn't matter much in the long term view. I finally ditched VTIAX after many years last year and transferred to VTSAX the same day. The additional peace of mind I have had since then is quite enjoyable. I always remember "It's about time in the market, not about timing the market". Thank you, J.B.
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Re: Why international?

Post by Starfox »

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Last edited by Starfox on Sun Nov 08, 2020 8:45 am, edited 1 time in total.
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Re: Why international?

Post by Starfox »

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Last edited by Starfox on Sun Nov 08, 2020 8:45 am, edited 1 time in total.
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Re: Why international?

Post by abuss368 »

Starfox wrote: Mon Apr 27, 2020 12:07 pm
Case in point todays 'action'....
Australia market up 1.5%
Kospi/S-Korea up 1.8%
Japan up 2.7%
Europe Stoxx 600 up 1.8%
USA/SP500 up 1.3%

USD down 0.2%

VXUS (Total International with Emerging Markets ETF) up 1.05%
VEA (Developed Markets ex-US and no Emerging Markets ETF) up 1.05%
VOO (SP500) up 1.3%
VTI (Total US) up 1.65%

US up more than INTL, when based on market closes UP all around the world higher than US/SP500 and the USD currency being DOWN...

Every moment I consider adding International to 25-30% of my equities, the above happens and I throw my hands in the air...
I thought over time currency impact is a wash?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why international?

Post by Starfox »

.....
Last edited by Starfox on Sun Nov 08, 2020 8:44 am, edited 2 times in total.
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Re: Why international?

Post by abuss368 »

Starfox wrote: Mon Apr 27, 2020 12:16 pm
abuss368 wrote: Mon Apr 27, 2020 12:11 pm
Starfox wrote: Mon Apr 27, 2020 12:07 pm
Case in point todays 'action'....
Australia market up 1.5%
Kospi/S-Korea up 1.8%
Japan up 2.7%
Europe Stoxx 600 up 1.8%
USA/SP500 up 1.3%

USD down 0.2%

VXUS (Total International with Emerging Markets ETF) up 1.05%
VEA (Developed Markets ex-US and no Emerging Markets ETF) up 1.05%
VOO (SP500) up 1.3%
VTI (Total US) up 1.65%

US up more than INTL, when based on market closes UP all around the world higher than US/SP500 and the USD currency being DOWN...

Every moment I consider adding International to 25-30% of my equities, the above happens and I throw my hands in the air...
I thought over time currency impact is a wash?
over time yes, but I watch it on day to day, to try and rationalize why INTL may be under/over performing US on any given day...but today it makes no sense, INTL markets all are up in local currency higher than SP500 today, and USD currency is lower (which should cause INTL out performance in USD currency, i.e. VXUS/VEA), but it isn't.
I did see on CNBC an hour or so ago that Europe closed and was up much higher than US.

This is confusing and hopefully someone who understands may be able to better explain.
John C. Bogle: “Simplicity is the master key to financial success."
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oneleaf
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Re: Why international?

Post by oneleaf »

abuss368 wrote: Mon Apr 27, 2020 12:17 pm I did see on CNBC an hour or so ago that Europe closed and was up much higher than US.

This is confusing and hopefully someone who understands may be able to better explain.
I've spent time in the past looking at these discrepancies, and my belief is that the US markets lead every other country's markets.Due to the time difference, Monday foreign markets will catch up with a lot of the movements from Friday's US markets. So today's market movements will be reflected when the foreign markets open in the morning.

I've seen this to be the case, even with big moves. Let's say foreign ETF's move up big on Friday (in the US markets) and move down big on Monday. You'll see foreign markets close up the following Monday morning, while the US markets open down.
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Re: Why international?

Post by DonIce »

Stef wrote: Mon Apr 20, 2020 12:43 am
Ambitious994 wrote: Sun Apr 19, 2020 11:43 pm The Vanguard Total International Stock Fund from 1997 to current has returned a CAGR of 3.67%. From 2000 to current it did a CAGR of 2.20%. That is complete and utter poor performance for an equity holding. I have no idea why folks in The Investing Community recommend going International. The S&P 500 Index is all you need for an equity holding.
You know what Bogle said about past performance?

Anyway, I wonder if people with 100% US allocation would change their AA if they weren't Americans. Lets say you're from UK, Sweden, Switzerland, Australia or Japan. Would you still invest 100% in US stocks or maybe go with VT?
You don't have to wonder about this. In every country in the world, there is overwhelming home country bias when it comes to stock ownership. See the graph here:

https://heritagefinancial.net/wp-conten ... 2-2017.png

As you can see, this is least problematic in the US because the US is such a big chunk of global equity. But investors everywhere tell themselves the same stuff as posters on this board do about the uniqueness and superiority of their own country and its stock markets.
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Re: Why international?

Post by stocknoob4111 »

The only thing that should be holding International right now is a cat... since it has the required 9 lives to wait for the performance to hopefully materialize! :D

Seriously, I have only 18% in International so at least I am not making the type of bet these Target Date Funds are with 30-40% International... even Bogle himself said that is just madness. In my view to bet so big on a single asset class that historically has a much higher risk profile while not delivering the corresponding expected risk adjusted return is insanity to me. Yet the money managers are doing it - Vanguard, Schwab, Fidelity all are betting BIG on International. It will be exciting to see in 2029 who exactly was right about this.
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Re: Why international?

Post by abuss368 »

stocknoob4111 wrote: Mon Apr 27, 2020 1:48 pm The only thing that should be holding International right now is a cat... since it has the required 9 lives to wait for the performance to hopefully materialize! :D
Ouch!
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Re: Why international?

Post by abuss368 »

stocknoob4111 wrote: Mon Apr 27, 2020 1:48 pm The only thing that should be holding International right now is a cat... since it has the required 9 lives to wait for the performance to hopefully materialize! :D

Seriously, I have only 18% in International so at least I am not making the type of bet these Target Date Funds are with 30-40% International... even Bogle himself said that is just madness. In my view to bet so big on a single asset class that historically has a much higher risk profile while not delivering the corresponding expected risk adjusted return is insanity to me. Yet the money managers are doing it - Vanguard, Schwab, Fidelity all are betting BIG on International. It will be exciting to see in 2029 who exactly was right about this.
Vanguard recommends 40% of stock and 30% of bonds to international.

Do you know what Schwab and Fidelity recommend?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why international?

Post by Shael_AT »

My portfolio has always been 90 equities and 10 bond, with 70 domestic and 30 international within the 90 equities block. I like to horde this into brokerage VTIAX because of #ForeignTaxCredit.

A contribution period doesn't go by where my finger doesn't itch to reduce to 20 international, 80 domestic.

It hurts.

But at the same time, backtesting shows long term growth pins not on consistent average returns but by time in market coupled with exceptional blockbuster years sprinkled in. Who knows what the next big sector will be.

To others points above, however, the growth potential is in emerging markets due to economies of scale, favorable demography and exponential labor growth with low cost. The pain here is that there is no sign those blocs of countries are in any way interested in liberalising their economies nor building up additional or existing institutions to reduce corruption and demonstrate transparency.

The countries that DO have this have terrible demographic projections (Europe, Japan, SK, TW, Aus, Nz, etc) , shrinking economies and overly regulated industries along with heavy social welfare obligations, which are set to explode in cost and burden due to, again, terrible demography 2030-2100. Maybe my inner Zeihan is peeking out, but for these reasons its hard to keep investing outside of North America and a handful of key east asian, pacific and European countries.

Blargh
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Re: Why international?

Post by rickcrna »

VXUS represents about 15% of my stock portfolio and after due diligence and research I've decided that for me continuing to hold this position simply doesn't pencil out. To my way of thinking, it makes little sense to hold onto something when it chronically underperforms in the hopes that there will be a time period when the losses are reversed. Yes, I acknowledge the arguments for holding onto VXUS and all of the fancy metrics and rationalizations often cited but its not working for my portfolio. If trends change, I can always reconsider. So my proceeds went to buy additional shares of VTI.

Rick
l1am
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Re: Why international?

Post by l1am »

stocknoob4111 wrote: Mon Apr 27, 2020 1:48 pm Seriously, I have only 18% in International so at least I am not making the type of bet these Target Date Funds are with 30-40% International... even Bogle himself said that is just madness. In my view to bet so big on a single asset class that historically has a much higher risk profile while not delivering the corresponding expected risk adjusted return is insanity to me. Yet the money managers are doing it - Vanguard, Schwab, Fidelity all are betting BIG on International. It will be exciting to see in 2029 who exactly was right about this.
The studies show that 20-30% INTL is on the efficient frontier though. I.e US only is higher volatility.

I wonder if we all broke down our US portfolio by sector and had to manually rebalance across them, would we consider cutting an entire sector out?

I haven’t studied it so idk if a particular sector has relatively underperformed over such a long period like INTL.
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Re: Why international?

Post by dmcmahon »

oneleaf wrote: Mon Apr 27, 2020 1:30 pm
abuss368 wrote: Mon Apr 27, 2020 12:17 pm I did see on CNBC an hour or so ago that Europe closed and was up much higher than US.

This is confusing and hopefully someone who understands may be able to better explain.
I've spent time in the past looking at these discrepancies, and my belief is that the US markets lead every other country's markets.Due to the time difference, Monday foreign markets will catch up with a lot of the movements from Friday's US markets. So today's market movements will be reflected when the foreign markets open in the morning.

I've seen this to be the case, even with big moves. Let's say foreign ETF's move up big on Friday (in the US markets) and move down big on Monday. You'll see foreign markets close up the following Monday morning, while the US markets open down.
If that were consistently true you could arbitrage the foreign markets by buying the ETFs (which trade here in the US) on days when the US market was up big, then sell into the equivalent rally on the foreign exchanges by selling in the morning the following day.
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Re: Why international?

Post by oneleaf »

dmcmahon wrote: Mon Apr 27, 2020 7:55 pm
oneleaf wrote: Mon Apr 27, 2020 1:30 pm
abuss368 wrote: Mon Apr 27, 2020 12:17 pm I did see on CNBC an hour or so ago that Europe closed and was up much higher than US.

This is confusing and hopefully someone who understands may be able to better explain.
I've spent time in the past looking at these discrepancies, and my belief is that the US markets lead every other country's markets.Due to the time difference, Monday foreign markets will catch up with a lot of the movements from Friday's US markets. So today's market movements will be reflected when the foreign markets open in the morning.

I've seen this to be the case, even with big moves. Let's say foreign ETF's move up big on Friday (in the US markets) and move down big on Monday. You'll see foreign markets close up the following Monday morning, while the US markets open down.
If that were consistently true you could arbitrage the foreign markets by buying the ETFs (which trade here in the US) on days when the US market was up big, then sell into the equivalent rally on the foreign exchanges by selling in the morning the following day.
No that's not the case at all. The price is always being discovered regardless of whether a market is open. All that I am saying is that the foreign market participants don't know how the next session's moves in the US are going to be until their markets are closed. If there was after-hours trading, it would surely reflect what they know is happening in the US market.
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Re: Why international?

Post by dmcmahon »

rickcrna wrote: Mon Apr 27, 2020 2:19 pm VXUS represents about 15% of my stock portfolio and after due diligence and research I've decided that for me continuing to hold this position simply doesn't pencil out. To my way of thinking, it makes little sense to hold onto something when it chronically underperforms in the hopes that there will be a time period when the losses are reversed. Yes, I acknowledge the arguments for holding onto VXUS and all of the fancy metrics and rationalizations often cited but its not working for my portfolio. If trends change, I can always reconsider. So my proceeds went to buy additional shares of VTI.

Rick
This was my reasoning as well. And I hope I am wrong. But if we get a few years of international out-performance there is no way it will ever close the yawning gap that's opened up. That would IMO be a selling opportunity, one that I will avail myself of in the few places where I'm stuck in VEA. I seem to be largely immune from "anchoring" to past prices, the only thing that matters is what lies ahead, and at this point, it's hard to see foreign markets leading the US despite their apparently attractive valuations. Maybe at some point they'll become attractive enough that the US companies will just buy them up!

Someone said if you don't understand something don't invest in it. And there is something about these foreign index funds that I'm clearly not understanding. I cannot explain their poor performance. I've looked at the strong dollar and that doesn't explain it. I've stripped tech out of the S&P 500 and the US still outperforms. Possibly there is some sector I need to strip out of the foreign indexes to reach parity with the US, but I haven't found it. Also if one sector was doing that badly you'd expect it to just shrink as a fraction of the foreign index (as, for instance, energy has done here in the US indexes).

I've considered the demographic headwinds Europe and Japan face, as well as their rising social spending costs (that we also face, BTW). But how can that explain the under-performance of global mega-corps based in those countries, that also sell into the US, China, and elsewhere, just as their US counterparts do? Just because their home country is struggling doesn't mean the companies in the same industries should suffer.
  • Unilever versus P&G
  • Shell or BP versus XOM or Chevron
  • Roche, Astra Zeneca, Glaxo versus Merck, J&J, Bristol Meyers
  • Airbus versus Boeing
  • Samsung versus Intel or TI
  • Toyota or Daimler versus GM and Ford
  • SAP versus MSFT
  • BASF versus 3M
  • Komatsu versus CAT
Edit: I found this article interesting, it's a short read, Christine Benz interview:

https://www.morningstar.com/articles/96 ... ave-lagged

It was written pre-crash, so now we have the L-shaped recovery in international versus the V in the US to add to the mix. Even before the crash, I didn't get anything like 10% annualized out of my international allocation. How well did VXUS track the MSCI All-World index cited in the article? I can't easily answer that, ACWX seems like the same index. It's up a tad from 10 years previously, maybe 10% over 10 years. VEA has beaten it (but it doesn't have the emerging market drag), VXUS has lagged it. None looks to have returned anything better than 1% a year on price. Even with 3% dividend yield that's still nowhere close.
Starfox
Posts: 159
Joined: Thu Feb 06, 2020 7:28 pm
Location: Caribbean

Re: Why international?

Post by Starfox »

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Last edited by Starfox on Sun Nov 08, 2020 8:44 am, edited 1 time in total.
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