VTSAX or VTWAX over the next 35 years?

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WhiteMaxima
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Re: VTSAX or VTWAX over the next 35 years?

Post by WhiteMaxima » Fri May 17, 2019 6:17 pm

oldzey wrote:
Fri May 17, 2019 6:09 pm
If you're a U.S. investor, invested in a S&P 500 or Total Market U.S.index fund, half of your revenues already come from outside the U.S.

So, you have an international fund, minus the risks (e.g. currency, sovereign, stability) and fees associated with investing in international funds.

Works for me! :beer
JoMoney wrote:
Fri Mar 30, 2018 8:07 pm
MarketWatch(2015): S&P 500 companies generate barely over half their revenue at home
Image
but I enjoy driving my BMW and fill Shell gasoline. S&P doesn't have these coompanies.

ChrisV
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Re: VTSAX or VTWAX over the next 35 years?

Post by ChrisV » Fri May 17, 2019 7:02 pm

This chart shows a good reason to go with WAX over SAX:

https://www.factorinvestor.com/blog/inv ... 2491_33267

Some time periods US outperforms international; other time periods international outperforms US.

As of today, we have experienced 10+ years of US outperformance.

Maybe that US outperformance will continue for the next 10 or 20 years.

I don't know, but history (and let's face it, that's really all we have to go on) says it won't. At some point (I have no idea when) international stocks will again outperform US.

At the very least, if you're already retired, it seems to me that having a significant allocation to international stocks would help mitigate sequence of returns risk.

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Crushtheturtle
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Re: VTSAX or VTWAX over the next 35 years?

Post by Crushtheturtle » Fri May 17, 2019 7:11 pm

As I see it, the power of index fund investing comes from the ability to own as many different companies as possible. Consider that the Market's long-term expansion is driven by only a small minority of its constituent businesses, with the remaining majority staying the same size, going down, or going bankrupt. Without knowing which is which, one should seek to own as many as possible in order to maximize the probability of participating in the long-term growth.

To cite an oft-used example, if a foreign company like Samsung comes to dominate its industry and consume sizable market share from a US company like Apple, what good does it do me that Apple also sells smart phones in Asia?

Of the two, I would recommend VTWAX.
"A sarcasm detector? Oh, that's a REAL useful invention." | | 25% US / 25% Ex-US / 25% LETFs / 25% The Wheel

RJC
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Re: VTSAX or VTWAX over the next 35 years?

Post by RJC » Fri May 17, 2019 7:34 pm

VTWAX isn't 100% international. About half of the composition is the US. We are talking about a fraction of a fraction of one's portfolio when bonds are added.

This is why I don't understand some of the harsh and dismissive language in these threads. We are debating over the smallest of *potential* margins here.

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Taylor Larimore
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Re: VTSAX or VTWAX over the next 35 years?

Post by Taylor Larimore » Fri May 17, 2019 7:56 pm

Bogleheads:

There is more than one road to Dublin.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

Ferdinand2014
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Re: VTSAX or VTWAX over the next 35 years?

Post by Ferdinand2014 » Fri May 17, 2019 8:08 pm

I just made some popcorn and can't find anything on Netflix. Don't stop now. This is like watching a really bad fight in a Wal Mart parking lot. I just can't look away.

In all seriousness though, I feel very blessed to live in the U.S. where we have the ability to invest in whatever we want, all over the world, at super low cost with the ability to have open discussions like this without consequence or concern.

For that we owe people like Taylor and Jack and many others for their efforts and sacrifices. We stand truly on the shoulders of giants.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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UpsetRaptor
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Re: VTSAX or VTWAX over the next 35 years?

Post by UpsetRaptor » Fri May 17, 2019 11:10 pm

ChrisV wrote:
Fri May 17, 2019 7:02 pm
This chart shows a good reason to go with WAX over SAX:

https://www.factorinvestor.com/blog/inv ... 2491_33267

Some time periods US outperforms international; other time periods international outperforms US.

As of today, we have experienced centuries of US outperformance.

Maybe that US outperformance will continue for the next 10 or 20 years.

I don't know, but history (and let's face it, that's really all we have to go on) says it won't. At some point (I have no idea when) international stocks will again outperform US.

At the very least, if you're already retired, it seems to me that having a significant allocation to international stocks would help mitigate sequence of returns risk.
FTFY

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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Sat May 18, 2019 8:32 am

WhiteMaxima wrote:
Fri May 17, 2019 6:17 pm
oldzey wrote:
Fri May 17, 2019 6:09 pm
If you're a U.S. investor, invested in a S&P 500 or Total Market U.S.index fund, half of your revenues already come from outside the U.S.

So, you have an international fund, minus the risks (e.g. currency, sovereign, stability) and fees associated with investing in international funds.

Works for me! :beer
JoMoney wrote:
Fri Mar 30, 2018 8:07 pm
MarketWatch(2015): S&P 500 companies generate barely over half their revenue at home
Image
but I enjoy driving my BMW and fill Shell gasoline. S&P doesn't have these coompanies.
You also miss Samsung, Roche, Unilever, Nestle, Novartis, and HSBC Holdings.

That's a nice colorful pie chart, illustrating international diversification of companies headquartered in the U.S.
UpsetRaptor wrote:
Fri May 17, 2019 11:10 pm
ChrisV wrote:
Fri May 17, 2019 7:02 pm
This chart shows a good reason to go with WAX over SAX:

https://www.factorinvestor.com/blog/inv ... 2491_33267

Some time periods US outperforms international; other time periods international outperforms US.

As of today, we have experienced centuries of US outperformance.

Maybe that US outperformance will continue for the next 10 or 20 years.

I don't know, but history (and let's face it, that's really all we have to go on) says it won't. At some point (I have no idea when) international stocks will again outperform US.

At the very least, if you're already retired, it seems to me that having a significant allocation to international stocks would help mitigate sequence of returns risk.
FTFY
I agree that it is wise to consider historical fact in forming our opinions about what the future might bring, in spite of the adage "past performance does not . . . ."

In my opinion the graph of U.S. vs foreign performance since 1969, and showing alternating streaks of outperformance, illustrates the potential benefit of adding an international stock allocation. But in my opinion the graph is not proof that market weight (VFWAX) will be better than some other domestic/internatioal mix. From the article "While market level valuation metrics can be useful as a first pass, they tend to obfuscate risk and reward within broad averages."
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

visualguy
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Re: VTSAX or VTWAX over the next 35 years?

Post by visualguy » Sat May 18, 2019 10:05 am

VTSAX plus rental properties.

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oldzey
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Re: VTSAX or VTWAX over the next 35 years?

Post by oldzey » Sat May 18, 2019 5:28 pm

VTSAX plus coffee.

Image
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Re: VTSAX or VTWAX over the next 35 years?

Post by PackersFan12 » Sat May 18, 2019 7:21 pm

oldzey wrote:
Sat May 18, 2019 5:28 pm
VTSAX plus coffee.

Image
Lol. Where can I find that mug?

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oldzey
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Re: VTSAX or VTWAX over the next 35 years?

Post by oldzey » Sat May 18, 2019 9:28 pm

BWildt wrote:
Sat May 18, 2019 7:21 pm
Lol. Where can I find that mug?
PM sent.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

NotTooDeepLearning
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Re: VTSAX or VTWAX over the next 35 years?

Post by NotTooDeepLearning » Sat May 18, 2019 11:21 pm

My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.

visualguy
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Re: VTSAX or VTWAX over the next 35 years?

Post by visualguy » Sun May 19, 2019 1:51 am

NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.

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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Sun May 19, 2019 6:35 am

visualguy wrote:
Sun May 19, 2019 1:51 am
NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.
In other words throwing the boglehead principals out the window and investing in the rear view mirror. Are you going to "change course" when international starts out-performing? I know you're going to use your crystal ball and say it won't, like you have in other threads and dodge the question, but answer this question seriously.
VTWAX and chill.

visualguy
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Re: VTSAX or VTWAX over the next 35 years?

Post by visualguy » Sun May 19, 2019 8:29 am

lostdog wrote:
Sun May 19, 2019 6:35 am
visualguy wrote:
Sun May 19, 2019 1:51 am
NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.
In other words throwing the boglehead principals out the window and investing in the rear view mirror. Are you going to "change course" when international starts out-performing? I know you're going to use your crystal ball and say it won't, like you have in other threads and dodge the question, but answer this question seriously.
No, because ex-US out-performance over a few years has never compensated for its long-term poor performance, so no temptation. The only thing that would make me change course is radical changes in Europe, Japan, China, etc. that would make their stock markets able to be competitive with that of the US, but that would take too long for my limited remaining lifetime if it ever happens. Human life is short, sadly... Also, remember that Bogle was actually against investing in the ex-US index, so I consider myself a very good Boglehead indeed.

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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Sun May 19, 2019 9:56 am

oldzey wrote:
Sat May 18, 2019 5:28 pm
VTSAX plus coffee.

Image
VTSAX plus VSIAX plus coffee :)
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X528
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Re: VTSAX or VTWAX over the next 35 years?

Post by X528 » Sun May 19, 2019 10:00 am

visualguy wrote:
Sun May 19, 2019 8:29 am
lostdog wrote:
Sun May 19, 2019 6:35 am
visualguy wrote:
Sun May 19, 2019 1:51 am
NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.
In other words throwing the boglehead principals out the window and investing in the rear view mirror. Are you going to "change course" when international starts out-performing? I know you're going to use your crystal ball and say it won't, like you have in other threads and dodge the question, but answer this question seriously.
No, because ex-US out-performance over a few years has never compensated for its long-term poor performance, so no temptation. The only thing that would make me change course is radical changes in Europe, Japan, China, etc. that would make their stock markets able to be competitive with that of the US, but that would take too long for my limited remaining lifetime if it ever happens. Human life is short, sadly... Also, remember that Bogle was actually against investing in the ex-US index, so I consider myself a very good Boglehead indeed.
Don't the studies by Vanguard and many others clearly show the benefits of investing globally?

NotTooDeepLearning
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Re: VTSAX or VTWAX over the next 35 years?

Post by NotTooDeepLearning » Tue May 21, 2019 4:28 pm

visualguy wrote:
Sun May 19, 2019 1:51 am
NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.
The past is hardly relevant, and certainly not a single 35 year period. America is not going to repeat the past 35 years. Nor is the rest of the world. Governments and economies will likely radically change in the future. But I guess it boils down to what you believe. If you believe in American exceptionalism and that it will continue for your lifetime then all US is the right path. I'm just starting my career and and think it'd be silly to go all US with most of my future investments.

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vineviz
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Re: VTSAX or VTWAX over the next 35 years?

Post by vineviz » Tue May 21, 2019 4:55 pm

X528 wrote:
Sun May 19, 2019 10:00 am
Don't the studies by Vanguard and many others clearly show the benefits of investing globally?
Yes, very much so.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

ChrisV
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Re: VTSAX or VTWAX over the next 35 years?

Post by ChrisV » Tue May 21, 2019 5:41 pm

visualguy wrote:
Sun May 19, 2019 8:29 am
lostdog wrote:
Sun May 19, 2019 6:35 am
visualguy wrote:
Sun May 19, 2019 1:51 am
NotTooDeepLearning wrote:
Sat May 18, 2019 11:21 pm
My opinion is that it doesn't matter. Staying the course, saving enough, and generally indexing matters.
It has made a significant difference so far. Also, there is no virtue in staying on a bad course. It's better to change course in that case.
In other words throwing the boglehead principals out the window and investing in the rear view mirror. Are you going to "change course" when international starts out-performing? I know you're going to use your crystal ball and say it won't, like you have in other threads and dodge the question, but answer this question seriously.
No, because ex-US out-performance over a few years has never compensated for its long-term poor performance, so no temptation. The only thing that would make me change course is radical changes in Europe, Japan, China, etc. that would make their stock markets able to be competitive with that of the US, but that would take too long for my limited remaining lifetime if it ever happens. Human life is short, sadly... Also, remember that Bogle was actually against investing in the ex-US index, so I consider myself a very good Boglehead indeed.
If long-term outperformance was the only criteria we used when choosing our investments, then we would all be 100% small cap value. :happy

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Re: VTSAX or VTWAX over the next 35 years?

Post by Oakwood42 » Tue May 21, 2019 6:00 pm

Triple digit golfer wrote:
Thu May 16, 2019 8:21 pm
Oakwood42 wrote:
Thu May 16, 2019 6:06 pm
lostdog wrote:
Wed May 15, 2019 11:11 am
VTWAX. It has 8032 stocks vs 3500 (VTSAX).

Don't be swayed by american exceptionalism, politics, past performance, ideologies, american nationalism, make believe crystal balls that can see into the future and many more weak arguments... Don't fall into this trap touted by some on this forum. Good luck with your choice.
reminds of a quote I once red from someone who knows a little about investing:

"For 240 years it's been a terrible mistake to bet against America, and now is no time to start."
Allocating some money to non U.S. equities is not a bet against America. It is a hedge for it.
Very fair point - thank you.

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Re: VTSAX or VTWAX over the next 35 years?

Post by arf30 » Tue May 21, 2019 6:08 pm

My taxable portfolio is 100% VTSAX/VTIAX but if I was starting out today I'd be 100% VTWAX.

My VTIAX cost basis is small enough that I could exchange it for VTWAX and just fund that in the future, I might end up going that route.

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Re: VTSAX or VTWAX over the next 35 years?

Post by wassabi » Wed May 22, 2019 5:18 am

vineviz wrote:
Tue May 21, 2019 4:55 pm
X528 wrote:
Sun May 19, 2019 10:00 am
Don't the studies by Vanguard and many others clearly show the benefits of investing globally?
Yes, very much so.
Do you recommend 100% VTWAX or some kind of tilt for better diversification?

columbia
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Re: VTSAX or VTWAX over the next 35 years?

Post by columbia » Wed May 22, 2019 5:44 am

If you own both (evenly), you’d be reasonably close to the observed diversification benefit of about 30% international.

Either way, it very well might not matter what you choose.

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vineviz
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Re: VTSAX or VTWAX over the next 35 years?

Post by vineviz » Wed May 22, 2019 11:22 am

wassabi wrote:
Wed May 22, 2019 5:18 am
Do you recommend 100% VTWAX or some kind of tilt for better diversification?
My view is that most investors, especially those who are still contributing to their portfolios, will do best with the simplest allocation that matches their required return and tolerable risk.

In short, I think 100% in VTWAX is an absolutely great choice for the equity portion of a portfolio. If your asset allocation includes bonds, something like Vanguard LifeStrategy Growth Fund (VASGX) would be a great choice also.

Although it is definite possible to add some additional holdings to VTWAX to improve diversification, I'd only recommend that approach to investors who are confident that they have the knowledge and discipline to execute such a strategy.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Thu May 23, 2019 5:12 pm

vineviz wrote:
Wed May 22, 2019 11:22 am
wassabi wrote:
Wed May 22, 2019 5:18 am
Do you recommend 100% VTWAX or some kind of tilt for better diversification?
My view is that most investors, especially those who are still contributing to their portfolios, will do best with the simplest allocation that matches their required return and tolerable risk.

In short, I think 100% in VTWAX is an absolutely great choice for the equity portion of a portfolio. If your asset allocation includes bonds, something like Vanguard LifeStrategy Growth Fund (VASGX) would be a great choice also.

Although it is definite possible to add some additional holdings to VTWAX to improve diversification, I'd only recommend that approach to investors who are confident that they have the knowledge and discipline to execute such a strategy.
Just curious, what do you think the approach of starting withVanguard Total World Stock Index Fund Admiral Shares (VTWAX) and adding some home country tilt?

Such as in the Siamond's series "Investing in the World" on the Bogleheads blog.

https://finpage.blog/2017/03/18/investi ... ld-part-1/
https://finpage.blog/2017/03/25/investi ... ld-part-2/
https://finpage.blog/2017/03/25/investi ... ld-part-3/
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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vineviz
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Re: VTSAX or VTWAX over the next 35 years?

Post by vineviz » Thu May 23, 2019 5:25 pm

ruralavalon wrote:
Thu May 23, 2019 5:12 pm
Just curious, what do you think the approach of starting withVanguard Total World Stock Index Fund Admiral Shares (VTWAX) and adding some home country tilt?
I haven't read his series (I'll bookmark it though).

I wouldn't push the US tilt too far, but something like this would seem like a fine plan to me:

70% Vanguard Total World Stock Index Fund Admiral Shares (VTWAX)
15% Vanguard Small-Cap Value Index Fund Admiral Shares (VSIAX)
15% Vanguard Utilities Index Fund Admiral Shares (VUIAX)

VUIAX has a relatively high minimum purchase, but the ETF (VPU) is readily available.

Add in some long-term Vanguard Long-Term Treasury Index Fund Admiral Shares (VLGSX) and you've got a portfolio started.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Thu May 23, 2019 5:39 pm

As I said, I am just curious. It seemed to me that siamond has a novel approach to the eternal debate over international stock allocation.

I have Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) in our joint taxable account with lots of unrealized capital gains, so won't be switching that to anything.
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Abarn
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Re: VTSAX or VTWAX over the next 35 years?

Post by Abarn » Thu May 23, 2019 7:14 pm

My apologies if this has already been posted but here is Vanguard's recent 10 year projected returns...

https://www.philly.com/business/vanguar ... 90522.html

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Re: VTSAX or VTWAX over the next 35 years?

Post by midareff » Thu May 23, 2019 7:19 pm

Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm
thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
thefirst100k:

Jack Bogle wrote the Forward in my latest book, The Bogleheads' Guide To The Three-Fund Portfolio. This is a portion of what he wrote:
In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. -- Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%.
Sometimes old advice is the best advice. :wink:

Best wishes.
Taylor
I believe to expand a bit further.. Jack said if you must hold international no more than 20% of equities.. and of course Warren Buffet says S&P500 90% and 10% Treasuries.

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Re: VTSAX or VTWAX over the next 35 years?

Post by donaldfair71 » Thu May 23, 2019 7:58 pm

If I am to assume that I can get diversified internationally by investing in American companies, it makes sense then that to get truly diversified domestically, I need to invest internationally, no?

If I get French exposure because Apple sells IPhones in Paris, doesn't it assume that I am missing some part of Uncle Sam's robust and powerful economic machine when I don't also invest in Toyota, or Honda, who do a ton of business here?

retiredflyboy
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Re: VTSAX or VTWAX over the next 35 years?

Post by retiredflyboy » Thu May 23, 2019 10:14 pm

3 fund portfolio. Total stock, total international and total bond. Stay the course! It really is that simple.
Facts are stubborn things. Everything works until it doesn’t.

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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Fri May 24, 2019 10:22 am

Abarn wrote:
Thu May 23, 2019 7:14 pm
My apologies if this has already been posted but here is Vanguard's recent 10 year projected returns...

https://www.philly.com/business/vanguar ... 90522.html
That's interesting, but still just an opnion.
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digit8
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Re: VTSAX or VTWAX over the next 35 years?

Post by digit8 » Fri May 24, 2019 10:45 am

Over the next 35 years, I'm not sure the difference is enough to sweat over. Someone starting a job today and putting 10, 15% of their income for life into either one of these is probably going to be, objectively, fine.

Yeah, they might have some 20/20 hindsight and kick themselves for not going with what turns out to be the better performer- but I cannot imagine we're talking about the difference between retiring to a life of luxury vs. homelessness level disparity.....which one might not think, looking at some of these posts...... :P
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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Fri May 24, 2019 10:56 am

digit8 wrote:
Fri May 24, 2019 10:45 am
Over the next 35 years, I'm not sure the difference is enough to sweat over. Someone starting a job today and putting 10, 15% of their income for life into either one of these is probably going to be, objectively, fine.

Yeah, they might have some 20/20 hindsight and kick themselves for not going with what turns out to be the better performer- but I cannot imagine we're talking about the difference between retiring to a life of luxury vs. homelessness level disparity.....which one might not think, looking at some of these posts...... :P
When talking about performance over the next 35 years I assume we are discussing an investor around 30 years of age. At that age and at the start of investing, the investor's contribution rate will be more important than the asset allocation decision.
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WhiteMaxima
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Re: VTSAX or VTWAX over the next 35 years?

Post by WhiteMaxima » Fri May 24, 2019 10:59 am

You can split AA into VTSAX/VTXUS/VTWAX (30/20/50). And history will tell after 35 years. All three are great funds.

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oldzey
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Re: VTSAX or VTWAX over the next 35 years?

Post by oldzey » Fri May 24, 2019 7:41 pm

Actual VTSAX license plates:

Image

Image

Let me know if you find any VTWAX plates. :P
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: VTSAX or VTWAX over the next 35 years?

Post by PackersFan12 » Sat Jun 08, 2019 9:16 am

Bump.

Instead of choosing between TVSAX or VTWAX, why not have both for the investor (like me) who wants international diversification, but may not be completely comfortable with a global market cap and wants to overweight US equities?

longinvest
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Re: VTSAX or VTWAX over the next 35 years?

Post by longinvest » Sat Jun 08, 2019 6:26 pm

BWildt wrote:
Sat Jun 08, 2019 9:16 am
Bump.

Instead of choosing between TVSAX or VTWAX, why not have both for the investor (like me) who wants international diversification, but may not be completely comfortable with a global market cap and wants to overweight US equities?
If you wish, you can have it all in a single fund: total US stocks and total international stocks with a home bias and some bonds thrown in the mix with Vanguard's LifeStrategy Moderate Growth Fund (VSMGX). It's good for a lifetime.
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

UpperNwGuy
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Re: VTSAX or VTWAX over the next 35 years?

Post by UpperNwGuy » Sat Jun 08, 2019 6:39 pm

BWildt wrote:
Sat Jun 08, 2019 9:16 am
Bump.

Instead of choosing between TVSAX or VTWAX, why not have both for the investor (like me) who wants international diversification, but may not be completely comfortable with a global market cap and wants to overweight US equities?
I can do that with VTSAX and VTIAX. I don't need to own VTWAX.

bjs2025
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Re: VTSAX or VTWAX over the next 35 years?

Post by bjs2025 » Sun Jun 09, 2019 5:13 am

cj2018 wrote:
Wed May 15, 2019 11:45 am
TropikThunder wrote:
Wed May 15, 2019 11:27 am
Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.
Neither VSTAX nor VTWAX, obviously.

VTTUX (Vanguard Total Universe Admiral) is what I bet all my networth on in the next 35 years.

And before you ask, yes I’m 100% positive such fund that covers every company in the Universe will be offered by Vanguard in the near future since Earth shall fall and we will all move to Mars :)

I hope you get my sarcasm lol
You’ve won the thread

bgf
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Re: VTSAX or VTWAX over the next 35 years?

Post by bgf » Sun Jun 09, 2019 6:45 am

Taylor Larimore wrote:
Wed May 15, 2019 1:28 pm
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
guyesmith:

I have considered simplifying The Three Fund Portfolio to a Two Fund Portfolio (Total World + Total Bond Market). However, keeping Total U.S. Stock Market and Total International Stock Market separate has several advantages:

Lower (combined) Expense Ratios (Admiral Shares): Total Stock Market (VTSAX) = 0.04%; Total International (VTIAX) = 0.11%; Total World (VTWAX) = 0.10%.

Lower Turnover (hidden costs): Total Stock Market = 3.4%; Total International = 3.4%; Total World Admiral 8.9%.

Better diversification (lower risk): Total U.S. Stock Market and Total International (combined) hold 9,900 stocks. Total World holds 8,125.

Flexibility: The best allocation between U.S. Total Stock Market and Total International is very controversial. Separate stock funds allow investors to choose their desired allocation.

Note: Figures are from February.

Best wishes.
Taylor
Thank you Mr. Larimore.

I'd like to add (and I'm sure you'll agree given your emphasis on simplicity), your last point was a negative for me. I struggled for a few years over my allocation to international and WHY it was what it was. In the end, I sold my US and International funds in tax advantaged accounts and switched to total world. This flexibility actually made it harder for me to stick to my plan. Fundamentally, for me, market cap just makes sense, and its far FAR easier to implement with total world.

In fact, that alone was worth losing out on the other benefits listed in your post.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

bck63
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Re: VTSAX or VTWAX over the next 35 years?

Post by bck63 » Sun Jun 09, 2019 7:37 am

oldzey wrote:
Fri May 17, 2019 6:09 pm
If you're a U.S. investor, invested in a S&P 500 or Total Market U.S.index fund, half of your revenues already come from outside the U.S.

So, you have an international fund, minus the risks (e.g. currency, sovereign, stability) and fees associated with investing in international funds.

Works for me! :beer
JoMoney wrote:
Fri Mar 30, 2018 8:07 pm
MarketWatch(2015): S&P 500 companies generate barely over half their revenue at home
Image
This is from memory, but the Japan stock market had something like 46% of its revenues come from outside Japan in 1991.

How has that worked out?

I invest internationally.

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blaugranamd
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Re: VTSAX or VTWAX over the next 35 years?

Post by blaugranamd » Sun Jun 09, 2019 8:25 am

Bogleheads are such ironic beasts sometimes:
Bogleheads in general: past performance doesn't predict future returns!
VTSAX proponents: USA has outperformed international for a long time. See chart.
VTWAX proponent: you can't use past performance! Look at this chart of economies over the past centuries
VSTAX proponents: trust old advice, invest in US
VTWAX proponents: trust new advice, invest in slightly different stocks (still old advice)

We all love to parrot the past performance doesn't predict the future like it's something we all completely ignore but the reality is we invest in stocks exactly because in the past they have produced returns that exceed most other things reliably. There's no guarantee in 10 years grass clippings won't outperform stocks but I'm still gonna be 100% stocks/bonds and 0% grass.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

schooner
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Re: VTSAX or VTWAX over the next 35 years?

Post by schooner » Sun Jun 09, 2019 8:36 am

No one knows! But VTWAX’s expense ratio is 6 basis points higher, which translates into about 2% in total over 35 years. That’s small, but real drag.

lostdog
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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Sun Jun 09, 2019 8:55 am

blaugranamd wrote:
Sun Jun 09, 2019 8:25 am
Bogleheads are such ironic beasts sometimes:
Bogleheads in general: past performance doesn't predict future returns!
VTSAX proponents: USA has outperformed international for a long time. See chart.
VTWAX proponent: you can't use past performance! Look at this chart of economies over the past centuries
VSTAX proponents: trust old advice, invest in US
VTWAX proponents: trust new advice, invest in slightly different stocks (still old advice)

We all love to parrot the past performance doesn't predict the future like it's something we all completely ignore but the reality is we invest in stocks exactly because in the past they have produced returns that exceed most other things reliably. There's no guarantee in 10 years grass clippings won't outperform stocks but I'm still gonna be 100% stocks/bonds and 0% grass.
Data doesn't matter to them because Jack was right and always will be.
VTWAX and chill.

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ruralavalon
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Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Sun Jun 09, 2019 9:54 am

blaugranamd wrote:
Sun Jun 09, 2019 8:25 am
Bogleheads are such ironic beasts sometimes:
Bogleheads in general: past performance doesn't predict future returns!
VTSAX proponents: USA has outperformed international for a long time. See chart.
VTWAX proponent: you can't use past performance! Look at this chart of economies over the past centuries
VSTAX proponents: trust old advice, invest in US
VTWAX proponents: trust new advice, invest in slightly different stocks (still old advice)

We all love to parrot the past performance doesn't predict the future like it's something we all completely ignore but the reality is we invest in stocks exactly because in the past they have produced returns that exceed most other things reliably. There's no guarantee in 10 years grass clippings won't outperform stocks but I'm still gonna be 100% stocks/bonds and 0% grass.
Correct, everybody uses data of past performance to justify their position.

The past is the only place we can find actual data.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

leftcoaster
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Re: VTSAX or VTWAX over the next 35 years?

Post by leftcoaster » Sun Jun 09, 2019 10:03 am

Consider tax placement.

I hold more international in taxable to capture the foreign tax credit. You won’t get this if you have international stocks in deferred accounts but you will pay those foreign taxes nonetheless.

Pretty sure this is on the BH wiki.

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FisheyePete
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Re: VTSAX or VTWAX over the next 35 years?

Post by FisheyePete » Sun Jun 09, 2019 10:19 am

HawkeyePierce wrote:
Wed May 15, 2019 12:48 pm
In my mind, the best argument for Total World over Total US is the tendency of markets to revert to the mean.


Image

I'm still looking for the Ancient Civilization fund, is it Vanguard? :P

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