Floating Net Worth w/ VT after 5 Years
- princetontiger
- Posts: 132
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Floating Net Worth w/ VT after 5 Years
Hey guys,
Just wanted to let people know that about 5 years ago, I had an idea: floating nearly every penny of my net worth in an ETF. I decided on VT. It's been a stressfree ride since.
While VT would most likely underperform small and midcap ETFs, and perhaps the S&P 500 (US markets still have highest ROE of all countries), I wanted something that would preserve purchasing power. VT has been a stud.
Does anyone else put money into a 100% stock basket?
[OT comments removed by admin LadyGeek]
Just wanted to let people know that about 5 years ago, I had an idea: floating nearly every penny of my net worth in an ETF. I decided on VT. It's been a stressfree ride since.
While VT would most likely underperform small and midcap ETFs, and perhaps the S&P 500 (US markets still have highest ROE of all countries), I wanted something that would preserve purchasing power. VT has been a stud.
Does anyone else put money into a 100% stock basket?
[OT comments removed by admin LadyGeek]
Re: Floating Net Worth w/ VT after 5 Years
I only use VTWSX/VT. It's the most bogleheadish fund there is. No home country bias, no guessing what is the best domestic and international allocation and mostly simplicity.
Buy the haystack.
Buy the haystack.
Last edited by lostdog on Sat Apr 21, 2018 6:27 pm, edited 1 time in total.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: Floating Net Worth w/ VT after 5 Years
Your run up occurred in a long bull market. Pretty easy when it is up, up, up.
Consider adding 20% Total US Bond and 30% Total International. 30% of your 80%.
Your 2050 and 2100 predictions are “interesting “.
Consider adding 20% Total US Bond and 30% Total International. 30% of your 80%.
Your 2050 and 2100 predictions are “interesting “.
Re: Floating Net Worth w/ VT after 5 Years
That's a great equity allocation. I would be anxious without at least 20% bonds.
Re: Floating Net Worth w/ VT after 5 Years
VT is Vanguard Total World, so princetontiger has 48.3% allocated to Total International as of March 31.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Floating Net Worth w/ VT after 5 Years
Check. Then just add bonds.drk wrote: ↑Sat Apr 21, 2018 6:43 pmVT is Vanguard Total World, so princetontiger has 48.3% allocated to Total International as of March 31.
Or don’t.
Re: Floating Net Worth w/ VT after 5 Years
Yeah, I'll leave that recommendation up to the OP because I don't think I can find any bonds buried in VT's portfolio.bloom2708 wrote: ↑Sat Apr 21, 2018 6:51 pmCheck. Then just add bonds.drk wrote: ↑Sat Apr 21, 2018 6:43 pmVT is Vanguard Total World, so princetontiger has 48.3% allocated to Total International as of March 31.
Or don’t.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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Re: Floating Net Worth w/ VT after 5 Years
I use 100% VT for my taxable account and Wellington with its bond component for 100% of my retirement accounts. A perfect 2 fund portfolio.
Re: Floating Net Worth w/ VT after 5 Years
Yes, I use VT as my portfolio benchmark, which my actual portfolio tracks closely.
Bonds have expected returns of less than 4%, and I dont think the benefit of decreased short term volatility is worth the cost of lower return given my time horizon.
Bonds have expected returns of less than 4%, and I dont think the benefit of decreased short term volatility is worth the cost of lower return given my time horizon.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
Re: Floating Net Worth w/ VT after 5 Years
100% of my investment money is simply in a low-cost S&P 500 index fund... and 100% of my shorter-term savings is in savings accounts, money market, and bonds.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Re: Floating Net Worth w/ VT after 5 Years
I'm considering 100% VT/VTWSX too. Right now I have it only in my SEP IRA.
The tough part about 5 years stress free (which is wonderful) is that the Total US Stock Market outperformed Total World. That's short term. If your 2050 prediction is true you're on the right track. There's a good chance it is true as the world economy and global middle class grows. I actually hope for the sake of humanity's living standards you're right.
To buy the 'world market' or weight a home-bias. That is the big question many of us are struggling with as VTWSX expense ratio drops and it nears its 10 year anniversary.
I think it'd be safe either way. 100% US or 100% world...it's a global economy. BUT, if the US takes a hard downward spiral for 10-20 years international would be a smart diversification. Honestly, it seems like Vanguard is pushing harder towards greater international diversification. Used to be everyone was all about 20% international. Now the Target Retirement Funds are more like 40% international. In that case, the Total World Fund is not all that much different at 55/45 NorthAmerica/World.
The tough part about 5 years stress free (which is wonderful) is that the Total US Stock Market outperformed Total World. That's short term. If your 2050 prediction is true you're on the right track. There's a good chance it is true as the world economy and global middle class grows. I actually hope for the sake of humanity's living standards you're right.
To buy the 'world market' or weight a home-bias. That is the big question many of us are struggling with as VTWSX expense ratio drops and it nears its 10 year anniversary.
I think it'd be safe either way. 100% US or 100% world...it's a global economy. BUT, if the US takes a hard downward spiral for 10-20 years international would be a smart diversification. Honestly, it seems like Vanguard is pushing harder towards greater international diversification. Used to be everyone was all about 20% international. Now the Target Retirement Funds are more like 40% international. In that case, the Total World Fund is not all that much different at 55/45 NorthAmerica/World.
- princetontiger
- Posts: 132
- Joined: Wed Oct 08, 2014 9:31 pm
Re: Floating Net Worth w/ VT after 5 Years
The number of strategies that will beat VT are maybe less than 10. The S&P 500 will indeed beat VT if US stocks outperform the rest of the world. Since 2008, that has been the case.
The US has the highest ROE than all countries... I think the UK and Sweden rival the US, however, the US has great multinationals. I suspect Europe to eventually get its act together, although ROE is a little lower in Europe since the eurozone crisis and the general business climate is a little less 'shareholders first' than in the US (which is fine). VT is 2/3 US and Europe, and the rest everywhere else.
US Small and midcap VALUE beat everythingelse, but this is historical and the trend may not always be there.
So... yes, SPY is up 350%, VT is up 200%... MDY is up over 400%.
VT, to me, 'adjusts' my net worth with inflation or (hopefully not) deflation.
The US has the highest ROE than all countries... I think the UK and Sweden rival the US, however, the US has great multinationals. I suspect Europe to eventually get its act together, although ROE is a little lower in Europe since the eurozone crisis and the general business climate is a little less 'shareholders first' than in the US (which is fine). VT is 2/3 US and Europe, and the rest everywhere else.
US Small and midcap VALUE beat everythingelse, but this is historical and the trend may not always be there.
So... yes, SPY is up 350%, VT is up 200%... MDY is up over 400%.
VT, to me, 'adjusts' my net worth with inflation or (hopefully not) deflation.
- asset_chaos
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Re: Floating Net Worth w/ VT after 5 Years
Since it opened in 2008, I've invested in total world (in the old fashioned mutual fund form) as my core stock holding. I have reasons, but they're very different from the OP's. I have no predictions of US decline, relative or absolute. Stocks may hedge inflation over the long term, but I think the evidence says stocks and inflation have low correlation in the short to medium terms. I invest in total world because I think broad diversification is the best way to invest in stocks. I neither know what businesses or sectors will rise and fall over my lifetime, nor what countries, markets, or currencies, nor really anything. Total world more or less obliterates all the ways to slice and dice the stock market and hides the relative gyrations of market subsectors. Is foreign doing better or worse than domestic; unless I make a specific effort to look it up, I neither know nor care. What I do know is that I don't know where the major innovations will come from that will shape stock returns of the future. Total world, I think, maximizes my chances of earning a fair share of those future returns. But most of all, I find it comfortable and easy to hold total world. It fits my temperament and pleases me. That makes total world, for me, much easier to stay the course with.
Regards, |
|
Guy
Re: Floating Net Worth w/ VT after 5 Years
My aunt pointed me to Total World and said “You want to buy some stocks? How does ‘all of them’ sound?” Resonated with me then, and still does!asset_chaos wrote: ↑Sun Apr 22, 2018 8:02 pm But most of all, I find it comfortable and easy to hold total world. It fits my temperament and pleases me. That makes total world, for me, much easier to stay the course with.
- zaboomafoozarg
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Re: Floating Net Worth w/ VT after 5 Years
Sometimes I wish I could stop fretting over my slice & dice asset allocation and just do a simple one like 75% VT (all-world equity) + 25% VFIUX (US intermediate treasury bonds).
Re: Floating Net Worth w/ VT after 5 Years
+1zaboomafoozarg wrote: ↑Sun Apr 22, 2018 9:13 pm Sometimes I wish I could stop fretting over my slice & dice asset allocation and just do a simple one like 75% VT (all-world equity) + 25% VFIUX (US intermediate treasury bonds).
Re: Floating Net Worth w/ VT after 5 Years
The “go to” stock fund for Bogleheads has been Vanguard Total Market (USA). Vanguard Total World makes sense to me. What would be the argument against it (in other words, sticking with Vanguard Total Market/stocking with USA vs World).
Re: Floating Net Worth w/ VT after 5 Years
Yep. 100% of my net worth is in VT other than a few thousand in cash for expenses management. That's the way it's been for years and that's how it's gonna stay. No regrets. Rebalancing, what's that?
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Re: Floating Net Worth w/ VT after 5 Years
I wish Vanguard would open up an Admiral Shares class for Total World.
Re: Floating Net Worth w/ VT after 5 Years
That would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
Re: Floating Net Worth w/ VT after 5 Years
This, and the expense ratio difference is why I'm not actually in VT, I simulate it with VTI/VXUSguyesmith wrote: ↑Mon Apr 23, 2018 8:40 amThat would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
Re: Floating Net Worth w/ VT after 5 Years
At first I simulated it also but if and when fund gives access to admiral shares I did not want to make a possible expensive exchange in my taxable account. I just went ahead and made the change before I had huge capital gains. No regrets. The simplicity, ease and contentment is worth the extra cost. The fund is low cost.Tamalak wrote: ↑Mon Apr 23, 2018 8:40 amThis, and the expense ratio difference is why I'm not actually in VT, I simulate it with VTI/VXUSguyesmith wrote: ↑Mon Apr 23, 2018 8:40 amThat would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
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Re: Floating Net Worth w/ VT after 5 Years
That's just the way the FTSE index is constituted. The fund prospectus indicates that they may go to a broader index someday, when one becomes available.guyesmith wrote: ↑Mon Apr 23, 2018 8:40 amThat would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
I also simulate, using the two mutual funds. Saves me over $400 per year. As the ER declines I'll probably switch to TWS (in my tax-deferred accounts) someday for simplicity, especially with an improved index.Tamalak wrote: ↑Mon Apr 23, 2018 8:40 amThis, and the expense ratio difference is why I'm not actually in VT, I simulate it with VTI/VXUSguyesmith wrote: ↑Mon Apr 23, 2018 8:40 amThat would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
My TWS allocation actually evolved from a longtime 50/20/30 (S&P 500/SC/EAFE) workplace portfolio. I guess I should have stayed the course for consistency when I rolled over at VG, but I decided to go 50/50 to match the larger part of my overall portfolio: a global, tilted, large value, small company portfolio. I also was influenced to change by the ebook (The Elements of Investing) Vanguard sent out several years ago which recommended using the TWS approach with either one or two funds.zaboomafoozarg wrote: ↑Sun Apr 22, 2018 9:13 pm Sometimes I wish I could stop fretting over my slice & dice asset allocation and just do a simple one like 75% VT (all-world equity) + 25% VFIUX (US intermediate treasury bonds).
VT 60% / VFSUX 20% / TIPS 20%
Re: Floating Net Worth w/ VT after 5 Years
I guess the question is what do you value more? Cost or more simplicity with extra cost?
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: Floating Net Worth w/ VT after 5 Years
100% stocks is NOT the way to preserve purchasing power. You've been very lucky that it's been a "stressfree ride". It will not always be so. A crash WILL happen. We don't know when, but there is no "if". Your purchasing power will not be preserved, at least temporarily. Are you ready for that?princetontiger wrote: ↑Sat Apr 21, 2018 5:58 pmWhile VT would most likely underperform small and midcap ETFs, and perhaps the S&P 500 (US markets still have highest ROE of all countries), I wanted something that would preserve purchasing power. VT has been a stud.
$10,000 invested 5 years ago is worth $16,000 today. Very nice.
$10,000 invested 5 years ago in U.S. only would be worth $24,500 today.
Not sure why you think VT has been a "stud". It's a good solid way to invest, for sure, and I'm sure it will have its day. At some point, the U.S. may under-perform the rest of the world, and you'll be happy you made this choice.
But again, I hope your goals are long-term, because 100% stocks is NOT the way to "preserve purchasing power" in the short-run.
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Re: Floating Net Worth w/ VT after 5 Years
I agree. No one reading this thread will be alive in 2100, so who really cares about those predictions? No one is in the position that decisions based on 2100 or 2075 will affect them in any material way.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) |
Don't wait to buy real estate. Buy real estate.. and wait.
Re: Floating Net Worth w/ VT after 5 Years
There is no mechanism for “splitting” the United States. One time there was a thought that states could secede. It was determined that that wasn’t allowed. I think there was a big to-do about it but I can’t quite remember what it was
Re: Floating Net Worth w/ VT after 5 Years
you mean, like, last year? Emerging Markets 37.8%, International 25.6%.HomerJ wrote: ↑Mon Apr 23, 2018 10:27 amprincetontiger wrote: ↑Sat Apr 21, 2018 5:58 pmWhile VT would most likely underperform small and midcap ETFs, and perhaps the S&P 500 (US markets still have highest ROE of all countries), I wanted something that would preserve purchasing power. VT has been a stud.
Not sure why you think VT has been a "stud". It's a good solid way to invest, for sure, and I'm sure it will have its day. At some point, the U.S. may under-perform the rest of the world, and you'll be happy you made this choice.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
- princetontiger
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Re: Floating Net Worth w/ VT after 5 Years
VT has beat SPY by a very slim margin the past 2 years.
I suspect VT could outperform SPY this year... but, who cares? I think we'll have a rally all the way through the end of 2019. Europe, which has lagged, should catch up. Also, EM should finally break above is highs set in 2000 and 2008.
I suspect VT could outperform SPY this year... but, who cares? I think we'll have a rally all the way through the end of 2019. Europe, which has lagged, should catch up. Also, EM should finally break above is highs set in 2000 and 2008.
- TimeRunner
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Re: Floating Net Worth w/ VT after 5 Years
VT's a great fund and expense ratio has been steadily dropping as it grows. Automatic rebalancing takes timing off the table. Most of my equity holding is VT, bonds in TSP G Fund as a former Fed. (70/30).
One cannot enlighten the unconscious. | "All I need are some tasty waves, a cool buzz, and I'm fine." -Jeff Spicoli
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Re: Floating Net Worth w/ VT after 5 Years
I think EM went above its 2000 high in 2004 and never went back to it. http://quotes.morningstar.com/chart/fun ... A%5B%5D%7Dprincetontiger wrote: ↑Mon Apr 23, 2018 7:16 pm VT has beat SPY by a very slim margin the past 2 years.
I suspect VT could outperform SPY this year... but, who cares? I think we'll have a rally all the way through the end of 2019. Europe, which has lagged, should catch up. Also, EM should finally break above is highs set in 2000 and 2008.
In nominal terms the EM fund seems to have broken above the 2007 high slightly. 1997 also seemed to be a slightly higher peak than 2000.
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Re: Floating Net Worth w/ VT after 5 Years
Considering your comments, I guess my early personal allocations were a real outlier. I began investing in 1995 under an advisor and a sub-advisor. The sub-advisor was an intermediary and the advisor managed the accounts. My US/non-US allocations were 51/49 and 47/53 for two accounts and a 40/60 account was also available. Knowing nothing about investing beyond the advisor's tutorial literature, I accepted these allocations as normal from the very beginning and nowadays an over-weighted US portfolio just doesn't feel right to me.guyesmith wrote: ↑Sun Apr 22, 2018 8:29 am I'm considering 100% VT/VTWSX too. Right now I have it only in my SEP IRA.
The tough part about 5 years stress free (which is wonderful) is that the Total US Stock Market outperformed Total World. That's short term. If your 2050 prediction is true you're on the right track. There's a good chance it is true as the world economy and global middle class grows. I actually hope for the sake of humanity's living standards you're right.
To buy the 'world market' or weight a home-bias. That is the big question many of us are struggling with as VTWSX expense ratio drops and it nears its 10 year anniversary.
I think it'd be safe either way. 100% US or 100% world...it's a global economy. BUT, if the US takes a hard downward spiral for 10-20 years international would be a smart diversification. Honestly, it seems like Vanguard is pushing harder towards greater international diversification. Used to be everyone was all about 20% international. Now the Target Retirement Funds are more like 40% international. In that case, the Total World Fund is not all that much different at 55/45 NorthAmerica/World.
Even more of an outlier, my assets were mainly large value and small caps. So holding large company growth stocks in TWS also seems odd. Actually, for me, a large value/small cap portfolio is the investing center of gravity and TWS is always going to feel unnatural. When I have doubts, I remind myself that TWS contains lots of prominent large companies that I would not otherwise own.
VT 60% / VFSUX 20% / TIPS 20%
Re: Floating Net Worth w/ VT after 5 Years
Interesting. How many years has this been and how has it worked out for you? Average return?pascalwager wrote: ↑Mon Apr 23, 2018 10:29 pmConsidering your comments, I guess my early personal allocations were a real outlier. I began investing in 1995 under an advisor and a sub-advisor. The sub-advisor was an intermediary and the advisor managed the accounts. My US/non-US allocations were 51/49 and 47/53 for two accounts and a 40/60 account was also available. Knowing nothing about investing beyond the advisor's tutorial literature, I accepted these allocations as normal from the very beginning and nowadays an over-weighted US portfolio just doesn't feel right to me.guyesmith wrote: ↑Sun Apr 22, 2018 8:29 am I'm considering 100% VT/VTWSX too. Right now I have it only in my SEP IRA.
The tough part about 5 years stress free (which is wonderful) is that the Total US Stock Market outperformed Total World. That's short term. If your 2050 prediction is true you're on the right track. There's a good chance it is true as the world economy and global middle class grows. I actually hope for the sake of humanity's living standards you're right.
To buy the 'world market' or weight a home-bias. That is the big question many of us are struggling with as VTWSX expense ratio drops and it nears its 10 year anniversary.
I think it'd be safe either way. 100% US or 100% world...it's a global economy. BUT, if the US takes a hard downward spiral for 10-20 years international would be a smart diversification. Honestly, it seems like Vanguard is pushing harder towards greater international diversification. Used to be everyone was all about 20% international. Now the Target Retirement Funds are more like 40% international. In that case, the Total World Fund is not all that much different at 55/45 NorthAmerica/World.
Even more of an outlier, my assets were mainly large value and small caps. So holding large company growth stocks in TWS also seems odd. Actually, for me, a large value/small cap portfolio is the investing center of gravity and TWS is always going to feel unnatural. When I have doubts, I remind myself that TWS contains lots of prominent large companies that I would not otherwise own.
- spdoublebass
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Re: Floating Net Worth w/ VT after 5 Years
I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
I'm trying to think, but nothing happens
Re: Floating Net Worth w/ VT after 5 Years
And it's JAGS for the score! (4 score)
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Floating Net Worth w/ VT after 5 Years
Great article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
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Re: Floating Net Worth w/ VT after 5 Years
The term "global" may be incorrectly used in the article. Global actually means the entire world, but seems to be used to mean only "non-US" in the article.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
VT 60% / VFSUX 20% / TIPS 20%
Re: Floating Net Worth w/ VT after 5 Years
I noticed that too. It seems he recommends 75% non-home county and 25% home country no matter where you live. Am I accurate on that?pascalwager wrote: ↑Tue Apr 24, 2018 3:20 pmThe term "global" may be incorrectly used in the article. Global actually means the entire world, but seems to be used to mean only "non-US" in the article.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
- spdoublebass
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Re: Floating Net Worth w/ VT after 5 Years
There are three parts to that article. You can get to the other parts at the bottom.
I took it to mean that (per that study) the sweet spot is 75% at Global market weight and 25% Domestic Tilt. Which would mean is US is 52% of global market weight, you'd be at around 64% US overall.
I think they are basing this off many things...such as currency, where you'll retire, etc.
I'm going from memory here I can't remember every detail. I think the point is that overall, if you are one of the top 3 large countries, then it doesn't really matter, but if you are a smaller one, it does matter more.
I don't know where US will end up, I have high hopes, but you never know. I do as the above article states.
Not that anyone's asking, but I decided on the following:
I hold a Global Portfolio with 70% of my portfolio. Then I tilt US to the other 30%.
I also do this with the fixed income. I hold 70% of it (split between TBM and TIBM) at the Global weight as per Sharpe, then I hold 30% of it in a stable Value fund.
When It grows, I may split the Total World if they never get an Admiral class, but I don't really care right now. I know I could probably do something better, but I'm at peace with this and I haven't had the urge to tinker. Many Roads to Dublin an all that.
Basically, It's a three fund portfolio, but I wanted some give with the international. I'm ok with it being more it that's what the Market Weight is, that's why I like having a portion of my portfolio that fluctuates.
I took it to mean that (per that study) the sweet spot is 75% at Global market weight and 25% Domestic Tilt. Which would mean is US is 52% of global market weight, you'd be at around 64% US overall.
I think they are basing this off many things...such as currency, where you'll retire, etc.
I'm going from memory here I can't remember every detail. I think the point is that overall, if you are one of the top 3 large countries, then it doesn't really matter, but if you are a smaller one, it does matter more.
I don't know where US will end up, I have high hopes, but you never know. I do as the above article states.
Not that anyone's asking, but I decided on the following:
I hold a Global Portfolio with 70% of my portfolio. Then I tilt US to the other 30%.
I also do this with the fixed income. I hold 70% of it (split between TBM and TIBM) at the Global weight as per Sharpe, then I hold 30% of it in a stable Value fund.
When It grows, I may split the Total World if they never get an Admiral class, but I don't really care right now. I know I could probably do something better, but I'm at peace with this and I haven't had the urge to tinker. Many Roads to Dublin an all that.
Basically, It's a three fund portfolio, but I wanted some give with the international. I'm ok with it being more it that's what the Market Weight is, that's why I like having a portion of my portfolio that fluctuates.
I'm trying to think, but nothing happens
- spdoublebass
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Re: Floating Net Worth w/ VT after 5 Years
This is at the top of Part 3:guyesmith wrote: ↑Tue Apr 24, 2018 4:21 pmI noticed that too. It seems he recommends 75% non-home county and 25% home country no matter where you live. Am I accurate on that?pascalwager wrote: ↑Tue Apr 24, 2018 3:20 pmThe term "global" may be incorrectly used in the article. Global actually means the entire world, but seems to be used to mean only "non-US" in the article.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
In other words, we’re starting from a global position (World) and adding a tilt towards the domestic market of interest. Let’s take a few examples:
100% World and 0% Domestic means a domestic exposure corresponding to the current market capitalization of the country (which varies over time).
-100% Domestic is trivial, full home country exposure, nothing else.
-Say a country represents 25% of the world’s market cap. Then a 75% World + 25% Domestic asset allocation means 44% domestic exposure (and the rest is international).
-Say a country represents 50% of the world’s market cap (US today, Japan at some point in the 80s).
-Then a 75% World + 25% Domestic asset allocation means 62% domestic exposure (and the rest is international).
I'm trying to think, but nothing happens
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Re: Floating Net Worth w/ VT after 5 Years
Sorry, I can't answer that. I'm not going to complete the article as I don't know what the author means by Global.guyesmith wrote: ↑Tue Apr 24, 2018 4:21 pmI noticed that too. It seems he recommends 75% non-home county and 25% home country no matter where you live. Am I accurate on that?pascalwager wrote: ↑Tue Apr 24, 2018 3:20 pmThe term "global" may be incorrectly used in the article. Global actually means the entire world, but seems to be used to mean only "non-US" in the article.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
VT 60% / VFSUX 20% / TIPS 20%
- spdoublebass
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Re: Floating Net Worth w/ VT after 5 Years
See my post directly above yours. Global is clearly defined as the entire World.pascalwager wrote: ↑Tue Apr 24, 2018 7:40 pm
Sorry, I can't answer that. I'm not going to complete the article as I don't know what the author means by Global.
I'm trying to think, but nothing happens
Re: Floating Net Worth w/ VT after 5 Years
+1Tamalak wrote: ↑Mon Apr 23, 2018 8:40 amThis, and the expense ratio difference is why I'm not actually in VT, I simulate it with VTI/VXUSguyesmith wrote: ↑Mon Apr 23, 2018 8:40 amThat would make getting 100% on board an easier decision.UpperNwGuy wrote: ↑Mon Apr 23, 2018 8:23 am I wish Vanguard would open up an Admiral Shares class for Total World.
Does anyone know why total world has less stocks than if you combine total us and total international?
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
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Re: Floating Net Worth w/ VT after 5 Years
Most of my DFA stocks were purchased in 1995 from 15 years of T-bill accumulation, and I slowly began to build more of a world market portfolio at work. In the late 90's a barber shop customer mentioned that he took his family to Hawaii twice using his S&P 500 gains, but I still had few market shares and never left the mainland. During the "lost decade" I did make about 7% annualized compared to a flat market. But nowadays, when I check the M* curves, DFA global large value and small cap did not beat the market over the last 23 years; but my retirement portfolio is adequate for my needs, and bolstered as it is by a pension. Maybe my heir will see the DFA funds rise strongly and even impressively.guyesmith wrote: ↑Tue Apr 24, 2018 7:25 amInteresting. How many years has this been and how has it worked out for you? Average return?pascalwager wrote: ↑Mon Apr 23, 2018 10:29 pmConsidering your comments, I guess my early personal allocations were a real outlier. I began investing in 1995 under an advisor and a sub-advisor. The sub-advisor was an intermediary and the advisor managed the accounts. My US/non-US allocations were 51/49 and 47/53 for two accounts and a 40/60 account was also available. Knowing nothing about investing beyond the advisor's tutorial literature, I accepted these allocations as normal from the very beginning and nowadays an over-weighted US portfolio just doesn't feel right to me.guyesmith wrote: ↑Sun Apr 22, 2018 8:29 am I'm considering 100% VT/VTWSX too. Right now I have it only in my SEP IRA.
The tough part about 5 years stress free (which is wonderful) is that the Total US Stock Market outperformed Total World. That's short term. If your 2050 prediction is true you're on the right track. There's a good chance it is true as the world economy and global middle class grows. I actually hope for the sake of humanity's living standards you're right.
To buy the 'world market' or weight a home-bias. That is the big question many of us are struggling with as VTWSX expense ratio drops and it nears its 10 year anniversary.
I think it'd be safe either way. 100% US or 100% world...it's a global economy. BUT, if the US takes a hard downward spiral for 10-20 years international would be a smart diversification. Honestly, it seems like Vanguard is pushing harder towards greater international diversification. Used to be everyone was all about 20% international. Now the Target Retirement Funds are more like 40% international. In that case, the Total World Fund is not all that much different at 55/45 NorthAmerica/World.
Even more of an outlier, my assets were mainly large value and small caps. So holding large company growth stocks in TWS also seems odd. Actually, for me, a large value/small cap portfolio is the investing center of gravity and TWS is always going to feel unnatural. When I have doubts, I remind myself that TWS contains lots of prominent large companies that I would not otherwise own.
At least I stayed the course. Let's call that a behavioral victory!
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
Okay, you're right. By global he means the entire world. So I'll continue reading the article. I'm interested now.spdoublebass wrote: ↑Tue Apr 24, 2018 8:42 pmSee my post directly above yours. Global is clearly defined as the entire World.pascalwager wrote: ↑Tue Apr 24, 2018 7:40 pm
Sorry, I can't answer that. I'm not going to complete the article as I don't know what the author means by Global.
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
Seems like you started doing this last year, but at 50/50. Then I thought it was only an unusual personal preference, but now I better recognize the tilting aspect. Would be easier using TWS and TSM together, of course. Will think some more about this idea. I recall Rick Ferri saying correct tilting begins with a total market fund (e.g., TSM and small value).spdoublebass wrote: ↑Tue Apr 24, 2018 4:22 pm There are three parts to that article. You can get to the other parts at the bottom.
I took it to mean that (per that study) the sweet spot is 75% at Global market weight and 25% Domestic Tilt. Which would mean is US is 52% of global market weight, you'd be at around 64% US overall.
I think they are basing this off many things...such as currency, where you'll retire, etc.
I'm going from memory here I can't remember every detail. I think the point is that overall, if you are one of the top 3 large countries, then it doesn't really matter, but if you are a smaller one, it does matter more.
I don't know where US will end up, I have high hopes, but you never know. I do as the above article states.
Not that anyone's asking, but I decided on the following:
I hold a Global Portfolio with 70% of my portfolio. Then I tilt US to the other 30%.
I also do this with the fixed income. I hold 70% of it (split between TBM and TIBM) at the Global weight as per Sharpe, then I hold 30% of it in a stable Value fund.
When It grows, I may split the Total World if they never get an Admiral class, but I don't really care right now. I know I could probably do something better, but I'm at peace with this and I haven't had the urge to tinker. Many Roads to Dublin an all that.
Basically, It's a three fund portfolio, but I wanted some give with the international. I'm ok with it being more it that's what the Market Weight is, that's why I like having a portion of my portfolio that fluctuates.
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
He experimented with different global stock percentages and found that 75% provided decent returns/volatility no matter if you lived in a high, average, or low performing domestic economy. So he ran all of the graphs using 75% global. The acceptable bond allocations ran from (at least) 20% to 50%, but the graphs were based on 30%.guyesmith wrote: ↑Tue Apr 24, 2018 4:21 pmI noticed that too. It seems he recommends 75% non-home county and 25% home country no matter where you live. Am I accurate on that?pascalwager wrote: ↑Tue Apr 24, 2018 3:20 pmThe term "global" may be incorrectly used in the article. Global actually means the entire world, but seems to be used to mean only "non-US" in the article.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
So, a representative portfolio for a US investor might be 53% TWS, 17% TSM, and 30% TBM.
Including an international bond allocation seemed to be immaterial.
VT 60% / VFSUX 20% / TIPS 20%
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Re: Floating Net Worth w/ VT after 5 Years
The article studies an allocation that would work for any country having a reasonable domestic stock market. You don't need to consider your country's percentage capitalization in the "global market". You would still invest 25% domestic and 75% global whether you lived in Japan, Italy, Sweden (highest returns), or US and could expect decent retirement performance.guyesmith wrote: ↑Tue Apr 24, 2018 3:05 pmGreat article.spdoublebass wrote: ↑Tue Apr 24, 2018 12:13 pm I'm only posting this here because it hasn't been brought up in this thread as of yet. I found this very interesting.
Siamond posted this on the Bogleheads Blog.
https://finpage.blog/2017/03/25/investi ... ld-part-3/
So this is their conclusion: "The author believes that this study makes a convincing case to seek a fairly high exposure to global (or international) equities, while keeping a significant tilt towards domestic equities."
I don't fully follow the rationale. Say US is 52% of the world's cap (according to VT it is), is the author against mirroring that? It keeps saying to go high on global but tilt towards domestic, but all the examples are the other direction.
VT 60% / VFSUX 20% / TIPS 20%