How much international stock? A suggestion.

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oldzey
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Re: How much international stock? A suggestion.

Post by oldzey »

The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 4/4/2018, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $61,061 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $29,329 in your Total International Stock Index Fund.

Of course, past performance does not indicate future performance.

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JoMoney
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Re: How much international stock? A suggestion.

Post by JoMoney »

I just ran across the below chart, and it reminded me of this thread. Apparently, holding international stocks at 20% (actually 18.3%) of total equities is the aggregate weighting of how U.S. investors hold international stocks:
Image
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Re: How much international stock? A suggestion.

Post by asif408 »

JoMoney wrote: Fri Nov 09, 2018 12:34 pm I just ran across the below chart, and it reminded me of this thread. Apparently, holding international stocks at 20% (actually 18.3%) of total equities is the aggregate weighting of how U.S. investors hold international stocks:
Image
Thanks for sharing. Before the early 1980s it appears international investing was not common at all.

It's funny to me how much that chart tracks performance. From a performance perspective, during times of international outperformance (1986-1994, 2002-2008), foreign equities holdings increased from 1 to 10% and from 10 to 20%, respectively. And during times of underperformance (1994-2002, 2008-present) the percentage of foreign equities has either remained steady or even fallen. So if history repeats and we have another bout of international outperformance we can expect international holdings to increase to about 30% of investors' equities.
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Re: How much international stock? A suggestion.

Post by oldzey »

"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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Re: How much international stock? A suggestion.

Post by ReformedSpender »

oldzey wrote: Fri Nov 09, 2018 2:21 pm
I'm with Jack! :beer
Jack does not state to avoid ex-US all together, but rather limit your exposure (~20%) :beer

For those with 30+ years of investment horizon, I'd wager to say there are compelling reasons to be diversified
Last edited by ReformedSpender on Fri Nov 09, 2018 2:46 pm, edited 3 times in total.
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Re: How much international stock? A suggestion.

Post by vineviz »

oldzey wrote: Fri Nov 09, 2018 2:21 pm Jack Bogle consistently makes compelling arguments for NOT investing in ex-US, as a US investor:
He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
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Re: How much international stock? A suggestion.

Post by visualguy »

ReformedSpender wrote: Fri Nov 09, 2018 2:36 pm
oldzey wrote: Fri Nov 09, 2018 2:21 pm
I'm with Jack! :beer
Good for you! However, Jack does not state to avoid ex-US all together, but rather limit your exposure (~20%) :beer

For those with 30+ years of investment horizon, I'd wager to say there are compelling reasons to be diversified
He does say to avoid it, but if you must invest in it, don't go over 20%.

I don't get the 30+ year horizon argument. You could have made it in the past, and it didn't work out.

I'm with Bogle and history on this - 0% for me.
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Re: How much international stock? A suggestion.

Post by oldzey »

The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 11/8/2018, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $65,102 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $26,911 in your Total International Stock Index Fund.

Of course, past performance does not indicate future performance.

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Words of wisdom

Post by Taylor Larimore »

Bogleheads:

When I look at oldzey's graph (above), I am reminded of this statement by author Bill Bernstein:
"When I disagree with Jack Bogle – I am usually wrong."
Best wishes.
Taylor
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Re: Words of wisdom

Post by abuss368 »

Taylor Larimore wrote: Fri Nov 09, 2018 4:47 pm Bogleheads:

When I look at oldzey's graph (above), I am reminded of this statement by author Bill Bernstein:
"When I disagree with Jack Bogle – I am usually wrong."
Best wishes.
Taylor
Well said indeed. :beer
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Re: How much international stock? A suggestion.

Post by Index24 »

20 percent
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Re: Words of wisdom

Post by JustinR »

Taylor Larimore wrote: Fri Nov 09, 2018 4:47 pm Bogleheads:

When I look at oldzey's graph (above), I am reminded of this statement by author Bill Bernstein:
"When I disagree with Jack Bogle – I am usually wrong."
Best wishes.
Taylor
Buy the haystack*

*Except for international because one guy told me not to
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Re: Words of wisdom

Post by visualguy »

JustinR wrote: Fri Nov 09, 2018 7:21 pm
Taylor Larimore wrote: Fri Nov 09, 2018 4:47 pm Bogleheads:

When I look at oldzey's graph (above), I am reminded of this statement by author Bill Bernstein:
"When I disagree with Jack Bogle – I am usually wrong."
Best wishes.
Taylor
Buy the haystack*

*Except for international because one guy told me not to
And because it has shown itself to be a lousy long-term investment, and because world economies, governments, and stock markets aren't as shareholder-friendly as in the US, and because of uncompensated currency risk, etc., etc.
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Re: Words of wisdom

Post by JustinR »

visualguy wrote: Fri Nov 09, 2018 7:36 pm
JustinR wrote: Fri Nov 09, 2018 7:21 pm
Taylor Larimore wrote: Fri Nov 09, 2018 4:47 pm Bogleheads:

When I look at oldzey's graph (above), I am reminded of this statement by author Bill Bernstein:
"When I disagree with Jack Bogle – I am usually wrong."
Best wishes.
Taylor
Buy the haystack*

*Except for international because one guy told me not to
And because it has shown itself to be a lousy long-term investment, and because world economies, governments, and stock markets aren't as shareholder-friendly as in the US, and because of uncompensated currency risk, etc., etc.
Buy the haystack*

*Just 55% of the haystack though... The other 45% sucks!

When are we adding this to the next edition of the Bogleheads Guide to Investing?
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Re: How much international stock? A suggestion.

Post by oldzey »

Jack Bogle has repeatedly stated that he does not use international, as a U.S. investor.

Jack Bogle has been right so far about not using international.

I'm with Jack - thank you, Jack! :beer
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Re: Words of wisdom

Post by visualguy »

JustinR wrote: Fri Nov 09, 2018 7:57 pm Buy the haystack*

*Just 55% of the haystack though... The other 45% sucks!

When are we adding this to the next edition of the Bogleheads Guide to Investing?
Anyone who listens to Bogle (i.e. "Bogleheads"), or looks at historical long-term performance already knows it, but I would definitely add some relevant text on the issues with ex-US if it's not already there (I haven't checked.)
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Re: Words of wisdom

Post by MJW »

visualguy wrote: Fri Nov 09, 2018 8:24 pm
JustinR wrote: Fri Nov 09, 2018 7:57 pm Buy the haystack*

*Just 55% of the haystack though... The other 45% sucks!

When are we adding this to the next edition of the Bogleheads Guide to Investing?
Anyone who listens to Bogle (i.e. "Bogleheads"), or looks at historical long-term performance already knows it, but I would definitely add some relevant text on the issues with ex-US if it's not already there (I haven't checked.)
Looks like the two of you are well on your ways to changing each other's minds. :beer
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Re: How much international stock? A suggestion.

Post by Plz »

oldzey wrote: Fri Nov 09, 2018 3:15 pm The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 11/8/2018, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $65,102 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $26,911 in your Total International Stock Index Fund.

Of course, past performance does not indicate future performance.

Image
Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
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Re: How much international stock? A suggestion.

Post by visualguy »

Plz wrote: Fri Nov 09, 2018 8:51 pm Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes, you can do it on portfolio visualizer. From 1986 until today (32 years), with your contribution schedule, the ending balances would be:

1) US only: $2.46M
2) ex-US only: $924K
3) 80/20 without rebalancing: $2.1M
4) 80/20 with rebalancing: $2.05M
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Re: How much international stock? A suggestion.

Post by Northern Flicker »

Going 100% domestic EXPOSES you to uncompensated currency risk (that of your home currency).
Currency exposure of int’l investments would not be called a risk if it could not go both ways— we would call it a liability. By definition a risk is a possible problem not a guaranteed one.

If your expenses are in your home currency then holding assets denominated in a different currency exposes you to the risk of the expenses becoming more costly in your home currency denomination. That is currency risk.
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Re: How much international stock? A suggestion.

Post by JoMoney »

Plz wrote: Fri Nov 09, 2018 8:51 pm...

Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes there is! Using PortfolioVisualizer.com , which is a neat tool someone (I think a Boglehead) created and provides for free on the Internet

Here's a link to PV comparison of $1000 monthly contributions to a 100% US and a 80/20 portfolio
Link
Over a 20+ year period, less than 0.6% difference annualized returns, standard deviation was pretty much the same.
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Re: How much international stock? A suggestion.

Post by JoMoney »

jalbert wrote: Fri Nov 09, 2018 10:43 pm
Going 100% domestic EXPOSES you to uncompensated currency risk (that of your home currency).
Currency exposure of int’l investments would not be called a risk if it could not go both ways— we would call it a liability. By definition a risk is a possible problem not a guaranteed one.

If your expenses are in your home currency then holding assets denominated in a different currency exposes you to the risk of the expenses becoming more costly in your home currency denomination. That is currency risk.
You seem to be confusing inflation risk and currency risk, they're not quite the same thing.

"Risk" does not "go both ways" unless you're under the false premise that risk is volatility, a risk is about consequences and the possibility of harm. The possibility of earning something extra is not a "risk". Some people hope that "risk" is compensated with "risk premiums", a higher expected value for being exposed to the risk. So far, I haven't seen anyone suggest there is a "risk premium" for being exposed to exchange rate fluctuations, there can't really be one for exchange rate fluctuations, it would have to be that one specific currency has a higher expected value than another specific currency (or basket of currencies), which is saying something different then being exposed to either side of the exchange rate fluctuations itself. Most people have their liabilities in only one currency.
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Re: How much international stock? A suggestion.

Post by typical.investor »

JoMoney wrote: Fri Nov 09, 2018 12:34 pm I just ran across the below chart, and it reminded me of this thread. Apparently, holding international stocks at 20% (actually 18.3%) of total equities is the aggregate weighting of how U.S. investors hold international stocks:
Image
That chart is misleading to me by it's incompleteness. Not a deliberate attempt to mislead anyone, but just misleading (assuming the Federal Reserve info below is correct).

First, one might conclude from looking at the chart above that investment is flowing from U.S. residents to foreign investments (particularly look at 2004-2014 which is covered in the data below). Looking below, we can see that's not true and a rough eyeballing shows maybe a $5-6 trillion increase in Foreign Residents holdings of US securities (compared to U.S Residents' Holding of total foreign securities). That's only been more pronounced in recent years I believe.

Of course, treasuries are securities too and so one might wonder whether this is a reflection of other countries carrying US debt.

While the data is limited (2012 to Q2 2016), it is pointed out that:
the recent increase in foreign residents' holdings of U.S. long-term securities reflects primarily an increase in foreign holdings of U.S. corporate stocks.
Image

So to me, it looks like foreign inflows are one reason for high US valuations, and if the dollars starts to fall, that these inflows could reverse. That's why I am not sure it's prudent for an accumulator to be putting everything into US stocks.
JoMoney wrote: Fri Nov 09, 2018 11:39 pm
Here's a link to PV comparison of $1000 monthly contributions to a 100% US and a 80/20 portfolio
Link
Over a 20+ year period, less than 0.6% difference annualized returns, standard deviation was pretty much the same.
Have a look at international only too. Through 2012, CAGR is about the same. The US has been on a tear in the last 6 years, and again I think part of that is foreign inflows into US equities.
JoMoney wrote: Fri Nov 09, 2018 11:51 pm "Risk" does not "go both ways" unless you're under the false premise that risk is volatility, a risk is about consequences and the possibility of harm. The possibility of earning something extra is not a "risk". Some people hope that "risk" is compensated with "risk premiums", a higher expected value for being exposed to the risk. So far, I haven't seen anyone suggest there is a "risk premium" for being exposed to exchange rate fluctuations, there can't really be one for exchange rate fluctuations, it would have to be that one specific currency has a higher expected value than another specific currency (or basket of currencies), which is saying something different then being exposed to either side of the exchange rate fluctuations itself. Most people have their liabilities in only one currency.
I think currency risk goes both ways for US investors even if they only have liabilities in USD. US equities are high now boosted by a strong USD which attracted foreign inflows. A weakened USD would likely result in flows out of US equities and lowered returns. Are you saying there is no risk for a US only investor to buy US equities when they are priced at a premium and that they are sure to never see foreign investment leaving the market due to currency concerns. I think that US investor will still have the same car, house, and healthcare payments to make, but potentially a smaller portfolio to do it from if the economy sours and foreign investment leaves.
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Re: How much international stock? A suggestion.

Post by JoMoney »

typical.investor wrote: Sat Nov 10, 2018 12:25 am...
JoMoney wrote: Fri Nov 09, 2018 11:51 pm "Risk" does not "go both ways" unless you're under the false premise that risk is volatility, a risk is about consequences and the possibility of harm. The possibility of earning something extra is not a "risk". Some people hope that "risk" is compensated with "risk premiums", a higher expected value for being exposed to the risk. So far, I haven't seen anyone suggest there is a "risk premium" for being exposed to exchange rate fluctuations, there can't really be one for exchange rate fluctuations, it would have to be that one specific currency has a higher expected value than another specific currency (or basket of currencies), which is saying something different then being exposed to either side of the exchange rate fluctuations itself. Most people have their liabilities in only one currency.
I think currency risk goes both ways for US investors even if they only have liabilities in USD. US equities are high now boosted by a strong USD which attracted foreign inflows. A weakened USD would likely result in flows out of US equities and lowered returns. Are you saying there is no risk for a US only investor to buy US equities when they are priced at a premium and that they are sure to never see foreign investment leaving the market due to currency concerns. I think that US investor will still have the same car, house, and healthcare payments to make, but potentially a smaller portfolio to do it from if the economy sours and foreign investment leaves.
No, that is not what I said, at all, I'm baffled how you got that.
"Currency risk" is a separate and distinct risk relating to constant changes in exchange rates between currencies.
Whether or not the equities in one market or another are overpriced or underpriced is a different issue, that can be looked at with or without consideration for what your expectations are for the relative values in the currency. One could make a good call that foreign stocks having higher earnings growth, higher price multiple expansion, and still lose when converting back to their home country currency.
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Re: How much international stock? A suggestion.

Post by typical.investor »

JoMoney wrote: Fri Nov 09, 2018 11:51 pm "Risk" does not "go both ways" unless you're under the false premise that risk is volatility, a risk is about consequences and the possibility of harm.
...
One could make a good call that foreign stocks having higher earnings growth, higher price multiple expansion, and still lose when converting back to their home country currency.
Yes, a rising dollar can make good international returns look blah. All's I am suggesting is that the reverse is also true and it does go both ways. A falling dollar can make poor or mediocre international returns look good or stellar in the eyes of a USD spending investor.
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Re: How much international stock? A suggestion.

Post by JoMoney »

typical.investor wrote: Sat Nov 10, 2018 1:48 am
JoMoney wrote: Fri Nov 09, 2018 11:51 pm "Risk" does not "go both ways" unless you're under the false premise that risk is volatility, a risk is about consequences and the possibility of harm.
...
One could make a good call that foreign stocks having higher earnings growth, higher price multiple expansion, and still lose when converting back to their home country currency.
Yes, a rising dollar can make good international returns look blah. All's I am suggesting is that the reverse is also true and it does go both ways. A falling dollar can make poor or mediocre international returns look good or stellar in the eyes of a USD spending investor.
Let me try to explain it this way:
If you have an opinion on the relative value of currencies, you can make bets in the forex market without involving equities at all.
Ignoring the spreads in currency exchange, there isn't really a risk if you have liabilities denominated in the currency you're moving money to, the risk is if your liabilities are only on the reverse side of the currency pair, that you will lose when moving the money back. Prices tend to be sticky in their home currency, a currency has essentially failed if prices aren't stable, people don't like to see the prices of food, rent, etc.. jumping all over the place.
If you bet your life savings on a fair coin flip, there is no "risk" of winning, the "risk" is that you lose your money and can't afford to eat.
Taking bets on fair coin flips with zero expected value is a bad bet, the Kelly Criterion confirms this (so if you're going to bet on a currency, you should only do so if you think you have an advantage some how).
This does sometimes get disputed on here by people that think "diversification" of things moving up and down is a benefit even if it doesn't have expected return.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: How much international stock? A suggestion.

Post by Plz »

visualguy wrote: Fri Nov 09, 2018 9:02 pm
Plz wrote: Fri Nov 09, 2018 8:51 pm Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes, you can do it on portfolio visualizer. From 1986 until today (32 years), with your contribution schedule, the ending balances would be:

1) US only: $2.46M
2) ex-US only: $924K
3) 80/20 without rebalancing: $2.1M
4) 80/20 with rebalancing: $2.05M
JoMoney wrote: Fri Nov 09, 2018 11:39 pm
Plz wrote: Fri Nov 09, 2018 8:51 pm...

Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes there is! Using PortfolioVisualizer.com , which is a neat tool someone (I think a Boglehead) created and provides for free on the Internet

Here's a link to PV comparison of $1000 monthly contributions to a 100% US and a 80/20 portfolio
Link
Over a 20+ year period, less than 0.6% difference annualized returns, standard deviation was pretty much the same.
Thank you both! Why do your two results differ so much? I think I must be reading them incorrectly
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Re: How much international stock? A suggestion.

Post by pokebowl »

Seeing as the usual crowd is bumping up this thread, I take it the other circular threads were locked?
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Re: How much international stock? A suggestion.

Post by petulant »

Plz wrote: Sat Nov 10, 2018 3:22 am
visualguy wrote: Fri Nov 09, 2018 9:02 pm
Plz wrote: Fri Nov 09, 2018 8:51 pm Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes, you can do it on portfolio visualizer. From 1986 until today (32 years), with your contribution schedule, the ending balances would be:

1) US only: $2.46M
2) ex-US only: $924K
3) 80/20 without rebalancing: $2.1M
4) 80/20 with rebalancing: $2.05M
JoMoney wrote: Fri Nov 09, 2018 11:39 pm
Plz wrote: Fri Nov 09, 2018 8:51 pm...

Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes there is! Using PortfolioVisualizer.com , which is a neat tool someone (I think a Boglehead) created and provides for free on the Internet

Here's a link to PV comparison of $1000 monthly contributions to a 100% US and a 80/20 portfolio
Link
Over a 20+ year period, less than 0.6% difference annualized returns, standard deviation was pretty much the same.
Thank you both! Why do your two results differ so much? I think I must be reading them incorrectly
They don’t difer. The $2.4 million vs. $2.1 million reflects the “less than .6% difference” in return playing out over 32 years.
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Re: How much international stock? A suggestion.

Post by ReformedSpender »

visualguy wrote: Fri Nov 09, 2018 2:48 pm
He does say to avoid it, but if you must invest in it, don't go over 20%.

I don't get the 30+ year horizon argument. You could have made it in the past, and it didn't work out.

I'm with Bogle and history on this - 0% for me.
Do you know what the next several decades holds in store? Things change and you're only right until you're wrong (Bogle)

Nobody knows nothing
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.
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Re: How much international stock? A suggestion.

Post by KJVanguard »

Bogle is 89 and worth $80M. It doesn't matter how he invests his money. It will surely last his lifetime no matter what he does.

Those of us half as old with far less can't take the risk of betting 100% on the US and potentially being 100% wrong. Do you think Bogle could convince Japanese investors -- who have been suffering for three decades -- that holding only domestic stocks is prudent? Does this home country bias that afflicts Bogle only apply to US investors?

He tells us to buy TSM because "you should own everything" (but note that everything only applies to domestic markets). Put all your eggs in one US basket and pray that basket doesn't run into any trouble.
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Re: How much international stock? A suggestion.

Post by JoMoney »

KJVanguard wrote: Sat Nov 10, 2018 6:37 am Bogle is 89 and worth $80M. It doesn't matter how he invests his money. It will surely last his lifetime no matter what he does.

Those of us half as old with far less can't take the risk of betting 100% on the US and potentially being 100% wrong. Do you think Bogle could convince Japanese investors -- who have been suffering for three decades -- that holding only domestic stocks is prudent? Does this home country bias that afflicts Bogle only apply to US investors?

He tells us to buy TSM because "you should own everything" (but note that everything only applies to domestic markets). Put all your eggs in one US basket and pray that basket doesn't run into any trouble.
This thread was about "How much international?" and it was started with the suggestion that 20% was a reasonable amount, which is what Bogle has suggested for those who believe an international allocation is necessary. Bogle is also an advocate for having a balanced allocation with bonds, not just holding stocks and "pray that basket doesn't run into any trouble".
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: How much international stock? A suggestion.

Post by Blues »

Having just checked the other day, international represents 20% of our equity holdings...though I sometimes lament the fact that we have any at all given its less than stellar performance.

(We've held international in our portfolio for decades.)
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Re: How much international stock? A suggestion.

Post by Hyperborea »

visualguy wrote: Fri Nov 09, 2018 9:02 pm
Plz wrote: Fri Nov 09, 2018 8:51 pm Is there a way to see the returns of a portfolio that contributes $1000 to the US total stock market portfolio on a monthly basis since inception, vs one that contributes $800 to US and $200 to intl indices?
Yes, you can do it on portfolio visualizer. From 1986 until today (32 years), with your contribution schedule, the ending balances would be:

1) US only: $2.46M
2) ex-US only: $924K
3) 80/20 without rebalancing: $2.1M
4) 80/20 with rebalancing: $2.05M
Is there any way to see how it will do for the next 32 years? Should we just pick whatever did well for the past period as our forward allocation? So, going forward I should I just pick whatever did best over the last 32 years? That seems to be what quite a number of "Bogleheads" are saying - use past performance to pick the best allocation going forward.

Based on that seeming "Boglehead" principle, one should skip US total market cause we can see that only a part of the haystack did better and we can pick that going forward.

Using the same time period (1986 until now) and the same contribution ($1000 / month) then these are far better:
US Small Cap Value: $3.52M
US Micro Cap: $4.05M

I'm sure with some digging we can find even better historical portfolios and choose those as our future allocation.
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Re: How much international stock? A suggestion.

Post by lostdog »

vineviz wrote: Fri Nov 09, 2018 2:41 pm
oldzey wrote: Fri Nov 09, 2018 2:21 pm Jack Bogle consistently makes compelling arguments for NOT investing in ex-US, as a US investor:
He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
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Re: How much international stock? A suggestion.

Post by visualguy »

ReformedSpender wrote: Sat Nov 10, 2018 6:31 am
visualguy wrote: Fri Nov 09, 2018 2:48 pm
He does say to avoid it, but if you must invest in it, don't go over 20%.

I don't get the 30+ year horizon argument. You could have made it in the past, and it didn't work out.

I'm with Bogle and history on this - 0% for me.
Do you know what the next several decades holds in store? Things change and you're only right until you're wrong (Bogle)

Nobody knows nothing
Things could change eventually, but countries don't transform the way their economies and stock markets are structured and governed quickly enough for it to make a difference in my time frame.

In 50 years or 100 years, I agree with you - nobody knows nothing. However, I'll be dead most likely within 35 years, and I'll be withdrawing much of the money well before then during my retirement. That's not enough time for China, India, the EU, Japan, etc. to transform themselves into something resembling the US in terms of the way their economies and stock markets operate, and for me to benefit from such a transformation as an index investor (even if it happens eventually, which is not certain).
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Re: How much international stock? A suggestion.

Post by fortyofforty »

lostdog wrote: Sat Nov 10, 2018 8:09 am
vineviz wrote: Fri Nov 09, 2018 2:41 pm
oldzey wrote: Fri Nov 09, 2018 2:21 pm Jack Bogle consistently makes compelling arguments for NOT investing in ex-US, as a US investor:
He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
Jack Bogle's recommendation against investing in international equities is not based on emotions or patriotism. Instead, it's based on an evaluation of economic and political structures.
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Re: How much international stock? A suggestion.

Post by vineviz »

fortyofforty wrote: Sat Nov 10, 2018 8:33 am
lostdog wrote: Sat Nov 10, 2018 8:09 am
vineviz wrote: Fri Nov 09, 2018 2:41 pm
oldzey wrote: Fri Nov 09, 2018 2:21 pm Jack Bogle consistently makes compelling arguments for NOT investing in ex-US, as a US investor:
He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
Jack Bogle's recommendation against investing in international equities is not based on emotions or patriotism. Instead, it's based on an evaluation of economic and political structures.
That’s not how it appears to me, though your view is more charitable than mine.
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Re: How much international stock? A suggestion.

Post by willthrill81 »

vineviz wrote: Sat Nov 10, 2018 10:01 am
fortyofforty wrote: Sat Nov 10, 2018 8:33 am
lostdog wrote: Sat Nov 10, 2018 8:09 am
vineviz wrote: Fri Nov 09, 2018 2:41 pm
oldzey wrote: Fri Nov 09, 2018 2:21 pm Jack Bogle consistently makes compelling arguments for NOT investing in ex-US, as a US investor:
He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
Jack Bogle's recommendation against investing in international equities is not based on emotions or patriotism. Instead, it's based on an evaluation of economic and political structures.
That’s not how it appears to me, though your view is more charitable than mine.
I don't understand why the global crowd automatically assumes that the U.S. crowd has taken its position in the complete absence of logic (e.g. emotions, patriotism, etc.). At best, this is an ad hominem attack.

Jack has clearly and repeatedly laid out his logical reasons for why he advocates for U.S. only, and since he's made his recommendation, he's been right. You may disagree with his logic, but stating that he isn't using logic at all is simply false.
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Re: How much international stock? A suggestion.

Post by lostdog »

willthrill81 wrote: Sat Nov 10, 2018 10:25 am
vineviz wrote: Sat Nov 10, 2018 10:01 am
fortyofforty wrote: Sat Nov 10, 2018 8:33 am
lostdog wrote: Sat Nov 10, 2018 8:09 am
vineviz wrote: Fri Nov 09, 2018 2:41 pm

He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
Jack Bogle's recommendation against investing in international equities is not based on emotions or patriotism. Instead, it's based on an evaluation of economic and political structures.
That’s not how it appears to me, though your view is more charitable than mine.
I don't understand why the global crowd automatically assumes that the U.S. crowd has taken its position in the complete absence of logic (e.g. emotions, patriotism, etc.). At best, this is an ad hominem attack.

Jack has clearly and repeatedly laid out his logical reasons for why he advocates for U.S. only, and since he's made his recommendation, he's been right. You may disagree with his logic, but stating that he isn't using logic at all is simply false.
Since when was betting, home bias and recency bias logical? Sounds like active management to me.
Last edited by lostdog on Sat Nov 10, 2018 10:41 am, edited 1 time in total.
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Re: How much international stock? A suggestion.

Post by siamond »

Here we are again... We should really find a way to post Google Ads somewhere at the bottom of the display of each "international stock" thread, and send the proceeds to The John C. Bogle Center for Financial Literacy... With the number of posts and page views, I predict very high returns on investment! :wink:
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Re: How much international stock? A suggestion.

Post by lostdog »

oldzey wrote: Wed Apr 04, 2018 7:56 pm The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 4/4/2018, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $61,061 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $29,329 in your Total International Stock Index Fund.

Of course, past performance does not indicate future performance.

Image
No, you're saying " I use past performance to invest in U.S. only stocks." Thanks Jack!
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Re: How much international stock? A suggestion.

Post by vineviz »

willthrill81 wrote: Sat Nov 10, 2018 10:25 am
vineviz wrote: Sat Nov 10, 2018 10:01 am
fortyofforty wrote: Sat Nov 10, 2018 8:33 am
lostdog wrote: Sat Nov 10, 2018 8:09 am
vineviz wrote: Fri Nov 09, 2018 2:41 pm

He consistently makes such arguments, it's true, but only a subset of investors find them compelling thankfully.
And I assume these people invest based on authority(Jack) and their strong emotions on patriotism and non-rational thinking.

If international kicks up in the future, you won't see these guys take subtle jabs at diversification with their past performance and Jack is right posts. Such a bad way to invest. I feel bad for young investors seeing this stuff.
Jack Bogle's recommendation against investing in international equities is not based on emotions or patriotism. Instead, it's based on an evaluation of economic and political structures.
That’s not how it appears to me, though your view is more charitable than mine.
I don't understand why the global crowd automatically assumes that the U.S. crowd has taken its position in the complete absence of logic (e.g. emotions, patriotism, etc.).
Because we can read what they write and hear what they say?

I’m not saying Bogle is stupid or malicious: just that’s he’s wrong in this subject and his arguments are illogical.

That said, I’m sure he couldn’t care less what I think: his financial future is secure whereas most of us need to make sure we aren’t making unforced errors with our portfolios.
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Re: How much international stock? A suggestion.

Post by Taylor Larimore »

vineviz wrote:I’m not saying Bogle is stupid or malicious: just that’s he’s wrong in this subject and his arguments are illogical.
vineviz:

Mr. Bogle has been right as clearly shown on the graph above. Give the man his due.

You may not agree with Jack, but is arguments are not "illogical." If you read his 26 page chapter "On Global Investing" in his book, Common Sense on Mutual Funds, you will learn that his arguments are very logical. There is nothing about "emotions or patriotism" as someone wrote.

Best wishes
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Re: How much international stock? A suggestion.

Post by willthrill81 »

vineviz wrote: Sat Nov 10, 2018 10:47 amI’m not saying Bogle is stupid or malicious: just that’s he’s wrong in this subject and his arguments are illogical.
The argument that someone an opposing view is being "illogical" is common but not necessarily true.

Bogle isn't just saying "Past performance will repeat itself in the future" or "You're American, so you should buy American stocks."
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Re: How much international stock? A suggestion.

Post by vineviz »

Taylor Larimore wrote: Sat Nov 10, 2018 12:26 pm You may not agree with Jack, but is arguments are not "illogical." If you read his 26 page chapter "On Global Investing" in his book, Common Sense on Mutual Funds, you will learn that his arguments are very logical. There is nothing about "emotions or patriotism" as someone wrote.
Jack Bogle is rich and famous. That doesn't mean he's right on this topic.

Many people believe whatever Jack Bogle says. That doesn't mean his arguments are logical.

Bogle's arguments are framed as being rational. That doesn't mean they aren't better explained as being emotional, xenophobic, or based on a presumption of American exceptionalism.
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Re: How much international stock? A suggestion.

Post by vineviz »

willthrill81 wrote: Sat Nov 10, 2018 12:55 pm Bogle isn't just saying "Past performance will repeat itself in the future" or "You're American, so you should buy American stocks."
He might not be JUST saying those things, but those two statements are the crux of his argument and the two main lines of defense mounted by his supporters on this topic.
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Re: How much international stock? A suggestion.

Post by fennewaldaj »

vineviz wrote: Sat Nov 10, 2018 1:00 pm
Taylor Larimore wrote: Sat Nov 10, 2018 12:26 pm You may not agree with Jack, but is arguments are not "illogical." If you read his 26 page chapter "On Global Investing" in his book, Common Sense on Mutual Funds, you will learn that his arguments are very logical. There is nothing about "emotions or patriotism" as someone wrote.
Jack Bogle is rich and famous. That doesn't mean he's right on this topic.

Many people believe whatever Jack Bogle says. That doesn't mean his arguments are logical.

Bogle's arguments are framed as being rational. That doesn't mean they aren't better explained as being emotional, xenophobic, or based on a presumption of American exceptionalism.
I don't think they are framed that way in his book. It is worth checking out common sense on mutual funds from the library and reading the chapter if you haven't already because I think his arguments are more nuanced / better stated in the book. I ultimately did not find them convincing.
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Re: How much international stock? A suggestion.

Post by willthrill81 »

vineviz wrote: Sat Nov 10, 2018 1:03 pm
willthrill81 wrote: Sat Nov 10, 2018 12:55 pm Bogle isn't just saying "Past performance will repeat itself in the future" or "You're American, so you should buy American stocks."
He might not be JUST saying those things, but those two statements are the crux of his argument and the two main lines of defense mounted by his supporters on this topic.
Don't confuse Bogle's arguments with that of others who've reached the same conclusion.
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Re: How much international stock? A suggestion.

Post by vineviz »

willthrill81 wrote: Sat Nov 10, 2018 1:09 pm
vineviz wrote: Sat Nov 10, 2018 1:03 pm
willthrill81 wrote: Sat Nov 10, 2018 12:55 pm Bogle isn't just saying "Past performance will repeat itself in the future" or "You're American, so you should buy American stocks."
He might not be JUST saying those things, but those two statements are the crux of his argument and the two main lines of defense mounted by his supporters on this topic.
Don't confuse Bogle's arguments with that of others who've reached the same conclusion.
I don't think I am. I know you were paraphrasing, but he's basically built his argument around the two statements you presented. That his supporters repeat the same argument isn't surprising.
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