What is the international portion of your portfolio and why?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Norton750
Posts: 98
Joined: Sat Mar 17, 2007 11:25 am

Re: What is the international portion of your portfolio and

Post by Norton750 » Tue Jan 13, 2015 3:17 pm

Within my equity holdings, my targets for international funds are:
- 9% VEUSX (European Index - Admiral)
- 9% VPADX (Pacific Index - Admiral)
- 9% VEMAX (Emerging Markets Index - Admiral)
- 9% VINEX (International Explorer)

Looking back at what happened with Japanese stocks in the 1980s, I was wary of doing the equivalent of following the EAFE "over the cliff" by holding a single broad-based international fund - in case another Japan situation were to occur. And so I made sure that I had my international holdings segregated. Over the years, I've been impressed by the relative swings between these different holdings - and the rebalancing that it has caused.

That being said, I'll probably aggregate these holdings into a single international fund when I follow a plan to simplify my portfolio when I'm somewhere in my 70s.

keelerjr12
Posts: 26
Joined: Tue Jan 13, 2015 2:56 am

Re: What is the international portion of your portfolio and

Post by keelerjr12 » Fri Jan 16, 2015 2:34 pm

100% in equities with 20% in VGSTX...

Why:

I've done numerous research and run the numbers for different time horizons and ranges and 15-20% gives me the highest returns for the level of risk. I'm not sure if 20 years from now I'll have this weighting of assets (who cares, it's 20 years from now), but right now I'm using this becauseI only really care about the next 5 years. And within the next 5 years I'm still seeing high correlations between US and Intl stocks with the US outperforming Intl, so why take on more risk for less return. In addition, the world is becoming a smaller place and many of US companies are already extremely global. So I'm getting Intl exposure there also.

YDNAL
Posts: 13774
Joined: Tue Apr 10, 2007 4:04 pm
Location: Biscayne Bay

Re: What is the international portion of your portfolio and

Post by YDNAL » Fri Jan 16, 2015 3:37 pm

keelerjr12 wrote:100% in equities with 20% in VGSTX...

Why:

I've done numerous research and run the numbers for different time horizons and ranges and 15-20% gives me the highest returns for the level of risk. I'm not sure if 20 years from now I'll have this weighting of assets (who cares, it's 20 years from now), but right now I'm using this becauseI only really care about the next 5 years. And within the next 5 years I'm still seeing high correlations between US and Intl stocks with the US outperforming Intl, so why take on more risk for less return. In addition, the world is becoming a smaller place and many of US companies are already extremely global. So I'm getting Intl exposure there also.
Hey, keelerjr12, sounds like you have it all figured out. If you publish an investment newsletter, would you please let me know where to sign up! :)

Now, seriously,
  • 1. NO ONE knows future returns, with certainty, ahead of time.
    2. Five years from now, International equities have greater return potential than U.S. equities -- simply by the mere fact that current yield remains the best indicator of future return.

Code: Select all

                                             YIELD
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
Dividend	  $0.20 	 3/24/2014	$27.19 	2.91%
Dividend	  $0.33 	 6/23/2014	$29.10 	4.47%
Dividend	  $0.15 	 9/23/2014	$27.84 	2.11%
Dividend	  $0.22 	12/19/2014	$26.11 	3.29%
2014 Total	$0.89                           3.20%

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
Dividend	  $0.21 	 3/24/2014	$47.10 	1.75%
Dividend	  $0.21 	 6/23/2014	$49.50 	1.66%
Dividend	  $0.23 	 9/23/2014	$49.60 	1.82%
Dividend	  $0.27 	12/19/2014	$51.76 	2.11%
2014 Total	$0.91                           1.83%
[/size]
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

keelerjr12
Posts: 26
Joined: Tue Jan 13, 2015 2:56 am

Re: What is the international portion of your portfolio and

Post by keelerjr12 » Fri Jan 16, 2015 4:26 pm

YDNAL wrote:
keelerjr12 wrote:100% in equities with 20% in VGSTX...

Why:

I've done numerous research and run the numbers for different time horizons and ranges and 15-20% gives me the highest returns for the level of risk. I'm not sure if 20 years from now I'll have this weighting of assets (who cares, it's 20 years from now), but right now I'm using this becauseI only really care about the next 5 years. And within the next 5 years I'm still seeing high correlations between US and Intl stocks with the US outperforming Intl, so why take on more risk for less return. In addition, the world is becoming a smaller place and many of US companies are already extremely global. So I'm getting Intl exposure there also.
Hey, keelerjr12, sounds like you have it all figured out. If you publish an investment newsletter, would you please let me know where to sign up! :)

Now, seriously,
  • 1. NO ONE knows future returns, with certainty, ahead of time.
    2. Five years from now, International equities have greater return potential than U.S. equities -- simply by the mere fact that current yield remains the best indicator of future return.

Code: Select all

                                             YIELD
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
Dividend	  $0.20 	 3/24/2014	$27.19 	2.91%
Dividend	  $0.33 	 6/23/2014	$29.10 	4.47%
Dividend	  $0.15 	 9/23/2014	$27.84 	2.11%
Dividend	  $0.22 	12/19/2014	$26.11 	3.29%
2014 Total	$0.89                           3.20%

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
Dividend	  $0.21 	 3/24/2014	$47.10 	1.75%
Dividend	  $0.21 	 6/23/2014	$49.50 	1.66%
Dividend	  $0.23 	 9/23/2014	$49.60 	1.82%
Dividend	  $0.27 	12/19/2014	$51.76 	2.11%
2014 Total	$0.91                           1.83%
[/size]
For VTSAX and VGTSX for the last 10+ years, dividend yields for VTIAX have exceeded that of VTSAX but the performance of VTSAX is twice that of VGTSX. In addition this research/article seems to disagree with the link you've provided. https://www0.gsb.columbia.edu/faculty/g ... return.pdf

I'm not saying anyone can predict stock returns and that historical returns can predict future returns. But when comparing portfolios by using historical data AND future projections you can begin to find an optimal range of weightings based on various correlations. I'd rather set my asset allocations according to some data rather than rules of thumb and just hope for the best.

Who knows I may be wrong... but I don't believe in a perfectly efficient market either.

User avatar
FreeAtLast
Posts: 619
Joined: Tue Nov 04, 2014 9:08 pm

Re: What is the international portion of your portfolio and

Post by FreeAtLast » Fri Jan 16, 2015 4:41 pm

JB says no more than 20% international equities (if you really must).
The Vanguard white paper says you should start at 20%.
So what do I own?.....you guessed it, 20%.
King Solomon would have been proud of me.
Illegitimi non carborundum.

keelerjr12
Posts: 26
Joined: Tue Jan 13, 2015 2:56 am

Re: What is the international portion of your portfolio and

Post by keelerjr12 » Fri Jan 16, 2015 4:51 pm

FreeAtLast wrote:JB says no more than 20% international equities (if you really must).
The Vanguard white paper says you should start at 20%.
So what do I own?.....you guessed it, 20%.
King Solomon would have been proud of me.
Exactly.. These are some pretty smart guys coming up with the same findings that I've come up with. There's no reason for me not to trust what they're saying. And that's how I set my international weighting at 20%.

User avatar
backpacker
Posts: 1620
Joined: Mon Sep 22, 2014 2:17 pm

Re: What is the international portion of your portfolio and

Post by backpacker » Fri Jan 16, 2015 5:06 pm

keelerjr12 wrote: For VTSAX and VGTSX for the last 10+ years, dividend yields for VTIAX have exceeded that of VTSAX but the performance of VTSAX is twice that of VGTSX. In addition this research/article seems to disagree with the link you've provided. https://www0.gsb.columbia.edu/faculty/g ... return.pdf
1) Higher dividend yields can predict higher returns even if dividend yields don't predict returns (i.e. dividends can predict relative returns without predicting absolute returns).

2) Take a look at the following chart from the 2011 Credit Suisse Yearbook. High-yield countries have reliably outperformed low-yield countries for more than a hundred years.

Image

keelerjr12
Posts: 26
Joined: Tue Jan 13, 2015 2:56 am

Re: What is the international portion of your portfolio and

Post by keelerjr12 » Fri Jan 16, 2015 5:46 pm

backpacker wrote:
keelerjr12 wrote: For VTSAX and VGTSX for the last 10+ years, dividend yields for VTIAX have exceeded that of VTSAX but the performance of VTSAX is twice that of VGTSX. In addition this research/article seems to disagree with the link you've provided. https://www0.gsb.columbia.edu/faculty/g ... return.pdf
1) Higher dividend yields can predict higher returns even if dividend yields don't predict returns (i.e. dividends can predict relative returns without predicting absolute returns).

2) Take a look at the following chart from the 2011 Credit Suisse Yearbook. High-yield countries have reliably outperformed low-yield countries for more than a hundred years.

Image
Thank you for this.

minesweep
Posts: 1180
Joined: Fri Mar 02, 2007 9:17 pm
Location: PA

Re: What is the international portion of your portfolio and

Post by minesweep » Fri Jan 16, 2015 5:53 pm

I keep between 25%-30% of equities in international. Currently it's 26%.

Taxable - Developed Markets 50% (was in Tax-Managed Int’l before the merge).
Taxable - Emerging Markets - 20%
IRA - Int'l Explorer Fund - 20% - Initial purchase in 2000 (before Vanguard had an Int'l Small Cap Index Fund).
IRA - Int'l Value - 10%

I’m thinking of getting rid of the Int’l Value in my IRA (moving the funds to a bond fund) and deploying the same amount from cash in my taxable account to the Developed Markets and Emerging Markets Funds.

Mike

User avatar
tractorguy
Posts: 624
Joined: Wed May 19, 2010 6:32 pm
Location: Chicago Suburb

Re: What is the international portion of your portfolio and

Post by tractorguy » Fri Jan 16, 2015 6:33 pm

My stock international exposure is 20% and all of my bonds are in my home country (U.S.). I am aware that this is lower than market weight would indicate but it is intentionally so. If I was planning to retire in a country that didn't have its currency as the world's defacto trading currency and that didn't have the U.S.' history of successfully encouraging industry, I'd probably have a higher percentage in international assets. But I'm retired in the U.S. so its a moot point.

My reasons for not holding more international are:
1) IMOP, international markets are more correlated than they used to be and I expect the trend to continue. The diversification advantage of going international is shrinking (if it hasn't disappeared already).
2) I'm retired in the U.S. and the bulk of my expenses will always be dollar denominated. I don't want to add currency risk to my portfolio as I withdraw from it to fund retirement.
3) I've lived overseas (5 years in UK and 5 years in Japan) and worked extensively with European and Asia suppliers. When I compare U.S. companies with their overseas counterparts, I don't see any inherent advantages that the overseas companies have that will tend to make them more successful in the marketplace. On the contrary, most of them are dealing with confiscatory taxation, opaque financial reporting, and corrupt business practices that make it very hard for them to pass on any profits to stock holders.

Somebody usually pops up about now these international allocation threads and asks if U.S. centric investors aren't worried about it becoming another Japan. I'm not. However, even if we did, it's not the worst thing in the world. Post crash, the majority of people in Japan, and especially there retirees are still living very well.
Lorne

Logan T
Posts: 185
Joined: Sat Sep 06, 2014 1:10 pm
Location: Colorado

Re: What is the international portion of your portfolio and

Post by Logan T » Fri Jan 16, 2015 6:42 pm

International stocks make up 40% of my stocks. They are broken down as follows:

15% VEU (All-World Ex-US)
15% VSS (All-World Ex-US Small-Cap)
10% VWO (Emerging Markets)

With my US stocks I do 50% Total US and 50% Extended Market (Total US minus S&P 500). So I wanted to do something similar with international (I would have done VXUS but VEU is what is available to me at TD Ameritrade commission-free). However I also wanted to have a decent exposure to emerging markets without lowering my VEU or VSS allocations. So I decided to add VWO at 10% (I figure anything less than 10% isn't worth owning).
You really don't need to begin saving for retirement before you reach 60. At that point, simply save 250 percent of your income each year and you'll be able to retire comfortably at 70. -Jonathan Pond

User avatar
backpacker
Posts: 1620
Joined: Mon Sep 22, 2014 2:17 pm

Re: What is the international portion of your portfolio and

Post by backpacker » Fri Jan 16, 2015 7:07 pm

keelerjr12 wrote: Thank you for this.
No problem. :happy

curmudgeon
Posts: 1521
Joined: Thu Jun 20, 2013 11:00 pm

Re: What is the international portion of your portfolio and

Post by curmudgeon » Sat Jan 17, 2015 2:19 am

I'm at 0% international, and I've been that way for about the last 10 years. I'm not a believer in diversification uber alles. Even in my US-based investments, I have at times applied concentration for higher risk and return, though I have shoveled the gains over into index funds.

I'm not philosophically opposed to international in my portfolio, but my IPS has a rule that says "don't fight the Fed", so when the Fed is massively devaluing the dollar, I don't like to buy international. It's market timing - too bad.

I consider many international economies to be less efficient than the US, with potential implications to the valuation of equities going forward, so I'm not convinced that P/E is directly comparable. I also consider some of the international economies with the most potential (China) to have significant political risk.

If/when I do go back to international, it will be a speculative move driven by exchange rates, so likely only for a few years. Since I don't like the tax costs of moving my taxable holdings, international will likely be limited to IRA/401K space.

User avatar
Noobvestor
Posts: 4668
Joined: Mon Aug 23, 2010 1:09 am
Contact:

Re: What is the international portion of your portfolio and

Post by Noobvestor » Sat Jan 17, 2015 3:06 am

tractorguy wrote:I've lived overseas (5 years in UK and 5 years in Japan) and worked extensively with European and Asia suppliers. When I compare U.S. companies with their overseas counterparts, I don't see any inherent advantages that the overseas companies have that will tend to make them more successful in the marketplace. On the contrary, most of them are dealing with confiscatory taxation, opaque financial reporting, and corrupt business practices that make it very hard for them to pass on any profits to stock holders.
curmudgeon wrote:I consider many international economies to be less efficient than the US, with potential implications to the valuation of equities going forward, so I'm not convinced that P/E is directly comparable. I also consider some of the international economies with the most potential (China) to have significant political risk.
I find these kinds of statements so fascinating coming from Bogleheads ... on the one hand, a belief that you can't outsmart the market and that the market is relatively efficient, but, at the exact same time, a conflicting belief that somehow the markets can't gauge geographical, political or economic risks across different countries. It makes less than no sense to me.

So which is it: the markets are aware of these obvious and well-known risks and price them in accordingly (i.e. your expected return is higher, other metrics being equal, in such situations), or the market is clueless and there is a free lunch to be had by sticking to 'safer' markets?
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: What is the international portion of your portfolio and

Post by itstoomuch » Sat Jan 17, 2015 3:19 am

Now, About 2% in an oil play, ADRs.
Years ago I was more diversified. Was never all that successful in international. Too many factors make international difficult to follow. I follow Bogle on this more than anything else. Also don't do REITs, AA, or bonds, except in personal trading.

Mostly out of the oil play, as of last week. Net loss. Trying to exit remaining without too much damage. :oops:
Last edited by itstoomuch on Mon Feb 09, 2015 1:21 pm, edited 1 time in total.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

lack_ey
Posts: 6559
Joined: Wed Nov 19, 2014 11:55 pm

Re: What is the international portion of your portfolio and

Post by lack_ey » Sat Jan 17, 2015 4:01 am

Noobvestor wrote:
tractorguy wrote:I've lived overseas (5 years in UK and 5 years in Japan) and worked extensively with European and Asia suppliers. When I compare U.S. companies with their overseas counterparts, I don't see any inherent advantages that the overseas companies have that will tend to make them more successful in the marketplace. On the contrary, most of them are dealing with confiscatory taxation, opaque financial reporting, and corrupt business practices that make it very hard for them to pass on any profits to stock holders.
curmudgeon wrote:I consider many international economies to be less efficient than the US, with potential implications to the valuation of equities going forward, so I'm not convinced that P/E is directly comparable. I also consider some of the international economies with the most potential (China) to have significant political risk.
I find these kinds of statements so fascinating coming from Bogleheads ... on the one hand, a belief that you can't outsmart the market and that the market is relatively efficient, but, at the exact same time, a conflicting belief that somehow the markets can't gauge geographical, political or economic risks across different countries. It makes less than no sense to me.

So which is it: the markets are aware of these obvious and well-known risks and price them in accordingly (i.e. your expected return is higher, other metrics being equal, in such situations), or the market is clueless and there is a free lunch to be had by sticking to 'safer' markets?
Agreed, currency risk is one thing, but the quotations and posts point to systemic risks beyond that. Do you expect a premium from these or not? If not, why? (I can think of the beginning of some arguments, but I'd like to hear them articulated from those who think this way)


For what it's worth, even if one does not believe in comparing one market's valuations versus another's, how about one market's current vs. historical valuation compared with another's current vs. historical? For example, many key international markets are trading at well below 50 percentile of their historical P/E10, plenty below 25 percentile, while the U.S. is above 90 percentile (warning: U.S. data goes back further in time, not quite comparable, many other caveats). I wouldn't overthink and overreact to this point, much less suggest changes to AA, but if you look at valuations at all, certainly this is something to consider, right?

Alchemist
Posts: 251
Joined: Sat Aug 30, 2014 6:35 am
Location: Florida

Re: What is the international portion of your portfolio and

Post by Alchemist » Sat Jan 17, 2015 6:58 am

I'm another person with 0% international. Why? Several reasons:

1. I don't think the currency risk and added cost/complexity are worth the effort for the diversification, especially considering...

2. That U.S. companies already get a very large amount of revenue from overseas. And large parts of this are not from exports, but from companies like Ford and GM that own dozens of 'foreign' car companies with factories all over the world. Which is why...

3. Markets are becoming quite interlocked, could that be undone in the future? Sure, but the event that would cause it would have to be so devastating it wouldn't matter where your equity exposure was anyway.

4. My personal view of the importance of the fundamentals, not of companies but of entire countries. By 2030, out of the 10 largest economies in the world only America, India, and Indonesia will have enough workers to fill available jobs due to the massive demographic shift most developed countries are (and even China btw) having due to negative population growth. This won't mean those countries won't be nice places to live, it just means it will be darn hard for their companies to grow when they can't find enough workers. As Japan has already shown, increasing productivity to make up for a population decrease can only go so far.
Noobvestor wrote: I find these kinds of statements so fascinating coming from Bogleheads ... on the one hand, a belief that you can't outsmart the market and that the market is relatively efficient, but, at the exact same time, a conflicting belief that somehow the markets can't gauge geographical, political or economic risks across different countries. It makes less than no sense to me.

So which is it: the markets are aware of these obvious and well-known risks and price them in accordingly (i.e. your expected return is higher, other metrics being equal, in such situations), or the market is clueless and there is a free lunch to be had by sticking to 'safer' markets?
Do I think that markets are efficient? Yes, but only so long as information is clear. There is a lot of opaqueness in international investing. Additionally market pricing is only accurate for current data. Future events, like a demographic shift over a decade away or the possibility of a war seven years from now in the South China Sea are not something markets are able to factor in before they are already happening. Is this speculating? Eh, maybe. But if I'm wrong and should have held 20% equities like most people seem to think is wise, my overall savings goals will not have been hurt to badly anyway. In the end, if RTM is true than international/domestic stock allocations will be about as relevant as S&P 500 vs TSM debates.

curmudgeon
Posts: 1521
Joined: Thu Jun 20, 2013 11:00 pm

Re: What is the international portion of your portfolio and

Post by curmudgeon » Sat Jan 17, 2015 12:33 pm

Noobvestor wrote:
tractorguy wrote:I've lived overseas (5 years in UK and 5 years in Japan) and worked extensively with European and Asia suppliers. When I compare U.S. companies with their overseas counterparts, I don't see any inherent advantages that the overseas companies have that will tend to make them more successful in the marketplace. On the contrary, most of them are dealing with confiscatory taxation, opaque financial reporting, and corrupt business practices that make it very hard for them to pass on any profits to stock holders.
curmudgeon wrote:I consider many international economies to be less efficient than the US, with potential implications to the valuation of equities going forward, so I'm not convinced that P/E is directly comparable. I also consider some of the international economies with the most potential (China) to have significant political risk.
I find these kinds of statements so fascinating coming from Bogleheads ... on the one hand, a belief that you can't outsmart the market and that the market is relatively efficient, but, at the exact same time, a conflicting belief that somehow the markets can't gauge geographical, political or economic risks across different countries. It makes less than no sense to me.

So which is it: the markets are aware of these obvious and well-known risks and price them in accordingly (i.e. your expected return is higher, other metrics being equal, in such situations), or the market is clueless and there is a free lunch to be had by sticking to 'safer' markets?
Speaking for myself, I absolutely do not believe that markets are perfectly efficient. I do believe that the US market, as a subset, is more efficient than European markets, which are in turn significantly more efficient than markets such as Brazil and India, which are in turn more efficient than Russia or China or Argentina or Venezuela. I consider the market to often exhibit recency bias, and thereby underweight some risks. If there's a "free lunch" to be had, it would be in not exposing myself to unnecessary currency risks, not in higher return for investment risk.

User avatar
og15F1
Posts: 338
Joined: Wed Dec 08, 2010 12:08 am

Re: What is the international portion of your portfolio and

Post by og15F1 » Sat Jan 17, 2015 2:03 pm

I have about 50% of equities in international. It's close to market weight and easy to handle for rebalancing purposes. The ETFs I use are VXUS and VEU.

Angst
Posts: 1737
Joined: Sat Jun 09, 2007 11:31 am
Location: St Louis, MO

Re: What is the international portion of your portfolio and

Post by Angst » Sat Jan 17, 2015 2:27 pm

Since sometime roughly around 2000, I've tried to keep my equity at about 50/50 US/Int'l. As much as I have no reason to imagine that we will be the next Japan anytime soon, neither do I have any reason to conclude we won't be. I feel I'm being conservative and I think it would be relatively wreckless of me to hold only domestic equity. But who knows? I judge no one, it's just what makes me feel reasonably safe.

Almost 3/4 of all my Int'l equity is held in the following five funds:

Code: Select all

VTIAX         Vanguard Total Int'l Admiral
DFIEX         DFA Int'l Core Equity I
DFIVX         DFA Int'l Value
VSS/VFSVX     Vanguard FTSE All-Wl SmCap
VEMAX/VWO     Vanguard FTSE EM
The remaining 1/4 or so, due variously to NTF fund accesss, TLH and a desire to tilt SCV, is spread out among the following:

Code: Select all

PDN           PowerShares FTSE RAFI Int'l S/M DevMrkts 
DLS           WisdomTree Int'l Small Cap
PXH           PowerShares FTSE RAFI EM
DGS           WisdomTree EM SmCap
EWX           SPDR S&P EM Small Cap

User avatar
fortyofforty
Posts: 986
Joined: Wed Mar 31, 2010 12:33 pm

Re: What is the international portion of your portfolio and

Post by fortyofforty » Sat Jan 17, 2015 2:43 pm

As my salary and income comes from the United States, my emergency funds are invested in short term securities in the United States, my checking account is in a bank located in the United States, and my home is in the United States, I think I'm more comfortable holding at least a portion of my long-term portfolio in international investments. I don't blame anyone else for not investing overseas, but I still think adding international serves to diversify my own portfolio and reduce the overall risk.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

User avatar
timboktoo
Posts: 698
Joined: Sun Mar 31, 2013 3:42 pm

Re: What is the international portion of your portfolio and

Post by timboktoo » Sat Jan 17, 2015 3:00 pm

One half of my stock portfolio is invested in Total International. It's been kind of painful the last few years (my return last year was only a little over 4%), but I am staying the course and continuing to rebalance.

My portfolio consists of 1/3 Total Bond Market, 1/3 Total Stock Market and 1/3 Total International Stock Market. The biggest reason I invest this way is comfort. This asset allocation keeps me from changing my portfolio based on what other people are doing or recommending. I am otherwise very prone to changing my portfolio, because I experience anxiety about being seen as stupid, to be quite honest with you. I didn't choose this portfolio based on math. I chose it based on an understanding of my flaws. I chose an allocation that I can keep and I believe that this will make all the difference in my returns.

- Tim

z3r0c00l
Posts: 1076
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: What is the international portion of your portfolio and

Post by z3r0c00l » Sat Jan 17, 2015 3:28 pm

40% domestic - 40% international - 20% domestic bonds.

Why? Diversification and the logic of inexpensively matching the market by owning all stocks according to their market cap. Why would I seek this in domestic stocks but not international?

User avatar
avenger
Posts: 775
Joined: Mon Dec 02, 2013 12:11 pm

Re: What is the international portion of your portfolio and

Post by avenger » Sat Jan 17, 2015 5:56 pm

z3r0c00l wrote:40% domestic - 40% international - 20% domestic bonds.

Why? Diversification and the logic of inexpensively matching the market by owning all stocks according to their market cap. Why would I seek this in domestic stocks but not international?

No international bonds?
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

columbia
Posts: 670
Joined: Tue Aug 27, 2013 5:30 am

Re: What is the international portion of your portfolio and

Post by columbia » Sat Jan 17, 2015 10:59 pm

That's certainly a peculiarity of the equities market weight advocates.

bpp
Posts: 1925
Joined: Mon Feb 26, 2007 12:35 pm
Location: Japan

Re: What is the international portion of your portfolio and

Post by bpp » Sun Jan 18, 2015 12:47 am

The international portion of my portfolio consists of BND (Vanguard US total bond), EMLC (emerging markets local currency bond index), the non-Japanese bonds in IGOV (developed ex-US government bond index) and the non-Japanese stocks in VT (Vanguard Total World Stock Index).

Stocks and bonds are both kept at 50% foreign, unhedged.

CJ_Punk
Posts: 14
Joined: Mon Jan 12, 2015 12:52 pm

What's Your International % and Why?

Post by CJ_Punk » Sun Jan 18, 2015 9:30 am

[Thread merged into here, see below (3rd page) --admin LadyGeek]

Just wondering. I'm putting together my my AA plan, and I'd love to hear from the board your thoughts on your own personal international percentages and why (also, if you have any invested in international bonds or not).

As of now, I'm at about 20% International stocks, 2% International bonds in terms of percentages of my overall portfolio, or (in other words) 22% of my stock allocation is international, and about 20% of my bond allocation is international (these figures are pre minor tilting, as I haven't finalized my AA, but I'm leaning heavily towards staying domestic (not intentionally, but still true)).

Thanks everyone!

WHL
Posts: 789
Joined: Mon Dec 10, 2012 2:22 pm

Re: What's Your International % and Why?

Post by WHL » Sun Jan 18, 2015 9:34 am

25% of my overall portfolio. No reason why, it sounded and felt good and I'm too lazy to change it.

blevine
Posts: 1845
Joined: Sat Feb 27, 2010 3:57 pm
Location: Paradise

Re: What's Your International % and Why?

Post by blevine » Sun Jan 18, 2015 9:38 am

I am now 25% Int of my stocks, 0% of my bonds.

I feel that bonds are the "safe" part of your portfolio, the cushion,
and therefore I am more conservative. Also there is little upside to
bond investing, except in deflationary times, but there is much downside, defaults.
Rule of law is very important to make sure bond holders are treated fairly when there
is a default, and this is simply riskier in most countries other than a handful, such as the US.

OTOH, there is lots of potential upside with international stocks. In fact I think my allocation
is too low given the US has grown and international has not lately. I have new equity cash
going into international and would go as high as 50% if I have enough cash to invest.
Not selling US stocks to do so. My REIT fund in my 401k is global, 50/50 US/int.

User avatar
Padlin
Posts: 675
Joined: Thu Mar 01, 2007 7:46 pm
Location: MA

Re: What is the international portion of your portfolio and

Post by Padlin » Sun Jan 18, 2015 10:18 am

30% of my Equities are International split 80% large 20% small per my ISP. Don't remember exactly why it was 30% as it was a good while ago, it came from reading a lot of Boglehead type books and this forum. I had good reason then, I'm not going to second guess it now.
Regards | Bob

User avatar
goodenyou
Posts: 1204
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: What is the international portion of your portfolio and

Post by goodenyou » Sun Jan 18, 2015 10:47 am

30% and declining. As international continues to perform poorly in comparison to US, and adding more to US only, international is becoming less a portion of my portfolio. Has there been a time where international has performed better than US? If so, when? TIA
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

User avatar
Padlin
Posts: 675
Joined: Thu Mar 01, 2007 7:46 pm
Location: MA

Re: What is the international portion of your portfolio and

Post by Padlin » Sun Jan 18, 2015 1:31 pm

goodenyou wrote:30% and declining. As international continues to perform poorly in comparison to US, and adding more to US only, international is becoming less a portion of my portfolio. Has there been a time where international has performed better than US? If so, when? TIA
Look at 2003 thru 08, roughly.
Regards | Bob

User avatar
timboktoo
Posts: 698
Joined: Sun Mar 31, 2013 3:42 pm

Re: What is the international portion of your portfolio and

Post by timboktoo » Sun Jan 18, 2015 1:36 pm

goodenyou wrote:30% and declining. As international continues to perform poorly in comparison to US, and adding more to US only, international is becoming less a portion of my portfolio. Has there been a time where international has performed better than US? If so, when? TIA
I just looked at a chart on Morningstar of Vanguard Total International vs. Vanguard Total Stock Mkt, from 01-01-2000 to today. TSM just took over TISM recently.

The tone people are using to describe international lately is telling, isn't it? It's almost as if we question why we're invested in it at all, after a short period of underperformance.

- Tim

User avatar
fortyofforty
Posts: 986
Joined: Wed Mar 31, 2010 12:33 pm

Re: What is the international portion of your portfolio and

Post by fortyofforty » Sun Jan 18, 2015 2:25 pm

timboktoo wrote:The tone people are using to describe international lately is telling, isn't it? It's almost as if we question why we're invested in it at all, after a short period of underperformance.

- Tim
This seems to be true.
"In a time of universal deceit, telling the truth becomes a revolutionary act." - George Orwell | There are many roads to doublin'. | Original Vanguard Diehard

User avatar
Padlin
Posts: 675
Joined: Thu Mar 01, 2007 7:46 pm
Location: MA

Re: What is the international portion of your portfolio and

Post by Padlin » Sun Jan 18, 2015 2:26 pm

timboktoo wrote:
The tone people are using to describe international lately is telling, isn't it? It's almost as if we question why we're invested in it at all, after a short period of underperformance.

- Tim
Such is the way recency bias works.
Regards | Bob

Postmon
Posts: 288
Joined: Mon Jan 02, 2012 2:46 pm

Re: What's Your International % and Why?

Post by Postmon » Sun Jan 18, 2015 6:06 pm

See this recent thread - same question:

viewtopic.php?f=10&t=155223&newpost=2338113&start=50

User avatar
ruralavalon
Posts: 13188
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: What's Your International % and Why?

Post by ruralavalon » Sun Jan 18, 2015 6:42 pm

International at 25% of stocks, 0% of bonds.

Vanguard's paper suggests 20-40% of stocks, but almost all of the diversification benefit is in the lower end of that range. International bonds seem an unnecessary complication, an additional expense, with little or no obvious benefit.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

staythecourse
Posts: 5692
Joined: Mon Jan 03, 2011 9:40 am

Re: What's Your International % and Why?

Post by staythecourse » Sun Jan 18, 2015 7:57 pm

I am 50/50.

As I have mentioned on this site before I know a few things as fact:
1. There are times when U.S. outperform
2. There are times when International outperform
3. No one knows in advance when either of the above happens

The other thing I do like is I find it very easy to stay the course with this %. Every year I am neither thrilled (own too much of the laggard) or despondent (own too much of the loser). So every year means I am flat in affect and agnostic of what happens in the equity markets. Nice to know in advance how I will respond at the end of 2015 already. :D

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

red5
Posts: 776
Joined: Sun Apr 01, 2012 4:42 pm

Re: What's Your International % and Why?

Post by red5 » Mon Jan 19, 2015 5:32 am

30% of equities (or .3 * .84 of total portfolio).

Why? I don't know, it seemed to be about the norm around here when I created my portfolio.

IPer
Posts: 1639
Joined: Sun Jul 28, 2013 8:51 pm

Re: What's Your International % and Why?

Post by IPer » Mon Jan 19, 2015 5:41 am

24% of equities - Why? I hold Target Funds and the allocation there is currently 24.7% plus I bought some other
foreign positions. My desired International is really 20% and I had thought I would correct that but it will take
a lot more time than I thought due to the rate of inflows into my account, I do not wish to sell things at this
point. Too much shifting around is worse than having some imbalances.
Read the Wiki Wiki !

Ignatious P. Daily
Posts: 160
Joined: Thu Oct 09, 2014 3:11 pm

Re: What's Your International % and Why?

Post by Ignatious P. Daily » Mon Jan 19, 2015 6:47 am

In my 401k, where I do a three fund portfolio, I contribute 50/50 to both US and Intl and do not rebalance. For simplicity. In other accounts where I have more flexibility I am a two fund portfolio and thus my international there is market cap weighted.

rakornacki1
Posts: 163
Joined: Mon Mar 24, 2014 4:02 pm
Location: South Carolina

Re: What's Your International % and Why?

Post by rakornacki1 » Mon Jan 19, 2015 8:04 am

Am currently at 22% international stocks, at the lower point of the VG recommended 20%-40% range.
Am currently invested in international bonds simply for 'maximum diversification'. While I know that it is not necessary to devote a portion of your portfolio to international bonds, it does provide for some additional diversification. ER is about the same.
Good luck in your investing.

User avatar
Aptenodytes
Posts: 3751
Joined: Tue Feb 08, 2011 8:39 pm

Re: What's Your International % and Why?

Post by Aptenodytes » Mon Jan 19, 2015 8:25 am

50%. Largely because that's the market weight, in rough numbers. And because it was my plan when I first came up with it and I stick with it to avoid committing behavioral errors.

supernova
Posts: 279
Joined: Fri Feb 21, 2014 8:45 am

Re: What's Your International % and Why?

Post by supernova » Mon Jan 19, 2015 8:56 am

30% of equities, 1/3 (so 33.3%) of stock, 22.5% overall. I figured 1/3 of stocks was a good middle ground between 20 and 50.

carofe
Posts: 330
Joined: Thu Mar 20, 2014 7:21 pm

Re: What's Your International % and Why?

Post by carofe » Mon Jan 19, 2015 11:06 am

12% of stock in international. International for me is only to help a little bit with my overall portfolio std dev.

I believe that putting more in international will not protect you if the US stock crashes so it doesn't help with diversification as some people think. No nowadays when 40% of the SP500 companies have their income from international markets and that the majority of non-US large cap companies have a significant amount of their revenues from the US market.
There is a saying in EU about this, "when US sneezes EU gets a cold".

However, in the period of one or two years they can behave differently so adding some to your portfolio can help with volatility.
US Total Stock Market + Intermediate Term Bond. That's it.

MaddMaxx
Posts: 65
Joined: Fri May 02, 2014 11:52 am

Re: What's Your International % and Why?

Post by MaddMaxx » Mon Jan 19, 2015 11:13 am

11% of my portfolio currently with no plans to increase it this year. I think the US companies bring better returns and most of them do business internationally.

User avatar
HomerJ
Posts: 11191
Joined: Fri Jun 06, 2008 12:50 pm

Re: What's Your International % and Why?

Post by HomerJ » Mon Jan 19, 2015 11:18 am

MaddMaxx wrote:most of them (U.S companies) do business internationally.
This. 10% of my portfolio is International stocks (That's 20% of my stocks, since I'm 50/50 stocks/bonds)

HongKonger
Posts: 1027
Joined: Tue Jun 21, 2011 10:35 am
Location: Deep in the Balkans

Re: What's Your International % and Why?

Post by HongKonger » Mon Jan 19, 2015 11:39 am

Non-US = 75% of equities.

Why? Home country bias, a penchant for non-US REITS, and 30% withholding tax on US dividends.

User avatar
Go Blue 99
Posts: 813
Joined: Thu Oct 09, 2008 3:42 pm

Re: What's Your International % and Why?

Post by Go Blue 99 » Mon Jan 19, 2015 1:15 pm

35% of equity. I came up with this after reading Four Pillars over a decade ago.

fposte
Posts: 1163
Joined: Mon Sep 02, 2013 1:32 pm

Re: What's Your International % and Why?

Post by fposte » Mon Jan 19, 2015 1:27 pm

20-25%. I'd actually consider more, but because of long-held taxable assets in large-cap equities with big unrealized gains, it's a struggle for me to get to the bond percentage I want without taking a big tax hit, and I prioritize making that happen over raising the international percentage.

Post Reply