Proper Stock ETF Allocation

[Diaperman1]

I am 80 and a Boglehead of two years.
I own three ETF’s: Total US Stock Market VTI), International Stock (VXUS) and BND

On the stock side I am 88% US and 12% International.
Should that allocation be altered? I am not attempting to hold the one that someone says is better, I simply want a reasonable exposure to the world.

[David Jay]

A common number is between 25% and 33% of the stock allocation - picking exactly one quarter or one third simplifies rebalancing math.

25% of stocks in your 78/22 portfolio would be 19.5% of overall portfolio, 33% of stocks would be 25.7% of overall portfolio.

Some hold less, others (notably Vanguard in their LifeStrategy funds) hold more. Some hold none at all.

[whodidntante]

A feller sort of wonders what the other 22% of your stocks is.

I like more than 12% myself. Asking here is a waste of time, though. One opinion per poster, with some proclaiming to represent a consensus. Wait and see.

[Diaperman1]

Geeesh, typo

Corrected orig. post.

I am 88% US and 12% International.

Sorry!

[mhadden1]

I am 80 and a Boglehead of two years.
I own three ETF’s: Total US Stock Market VTI), International Stock (VXUS) and BND

On the stock side I am 66% US and 12% International.
Should that allocation be altered? I am not attempting to hold the one that someone says is better, I simply want a reasonable exposure to the world.

Vanguard Total World (VT) is about 60% US/40% foreign. My guess is that most Bogleheads hold less than 40% foreign. I personally am about 80% US but it's not because of some kind of Captain Queeg geometric logic.

I must say you seem to have a very cool Bogleheads portfolio.

[steadyosmosis]

25% of my equities are international.

[sycamore]

... I simply want a reasonable exposure to the world.

My two cents: 12% of stocks in International is reasonable.

Furthermore, there are many US/International splits that are reasonable. 88/12 is one of them.

[breakfastinbed]

People have attempted to approach this scientifically, e.g. https://web.archive.org/web/20200513135 ... lgiecr.pdf

Keep in mind you are posting this question to a forum where many members underweight international, often drastically.

I would consider a reasonable allocation to international to be 25-50% of equities (ideally 30-40%).

You'll get a wide variety of answers here, and there isn't a "correct" answer, but what I would say is that many investing philosophies recommend holding the whole market at cap weight, and if you intend to not do that, regardless of your tilt, you should have a well thought-out, objective reasoning for doing so, that at least satisfies yourself.

[bonesly]

On the stock side I am 88% US and 12% International.
Should that allocation be altered? I am not attempting to hold the one that someone says is better, I simply want a reasonable exposure to the world.

As others have noted, this is a personal decision about what "reasonable exposure to the world" means to you. Vanguard Target Date Funds and Life Strategy Funds use 60% US and 40% Int'l which matches the world market-cap weighting of US vs Int'l. Many Bogleheads that want int'l exposure aren't comfortable with 40% and use something less. Some Bogleheads don't want any int'l exposure and go 100% US.

Here's some background that might help you make your personal decision.

There's essentially two camps among Bogleheads: a) Those that are on board with the global market cap weighting, which is about 60% US stock and 40% ex-US stock; and b) those that have a home bias (US will usually outperform), which is about 80% US stock and 20% ex-US stock (some even omit Int'l altogether). I'm in camp a) based on the chart below from WisdomTree, the white paper from Vanguard, and the more recent article from Vanguard.


Vanguard White Paper: International Equity - Considerations and Recommendations
Vanguard Web Article: Making the case for international equity allocations

Subsequently, I think anything between 10%-40% is "reasonable," but less than 10% might as well be 0% as it's not going to "move the needle."

[RetirementClass2021]

My equity position is 80% VTI/20% VXUS

[ruralavalon]

I am 80 and a Boglehead of two years.
I own three ETF’s: Total US Stock Market VTI), International Stock (VXUS) and BND

On the stock side I am 88% US and 12% International.
Should that allocation be altered? I am not attempting to hold the one that someone says is better, I simply want a reasonable exposure to the world.

In general I suggest in the area of 20-30% of stocks in international stocks.