Dunn's "Order of importance" list was posted on 12-18-2005 - almost 13 years ago.permport wrote: ↑Sat Aug 18, 2018 12:38 amI agree completely and don't understand why people try to dispute this. The truth is that no one can predict the future, and wider diversification is really your only effective protection against that fact.Noobvestor wrote: ↑Sat Aug 18, 2018 12:27 amI mean I don't know how else to convince someone that (8) falls under (5) other than to mention Japan, which represented 45% of the global market in 1989, then fell and stayed down. Markets can do significantly better or worse than other markets. The US benefited from tailwinds throughout the 20th Century, not least of which was a war that devastated much of the developed world overseas. Maybe it's truly an exceptional snowflake of a nation that will always come out on top, but some people thought that about Japan, too ... the price of being wrong was high.oldzey wrote: ↑Fri Aug 17, 2018 11:46 pmOne of Taylor Larimore's favorite sayings is: "When experts disagree it is often because it does not make a foreseeable difference."
Steven Dunn's* remarks reinforce this observation (see #8 below), originally found at: http://socialize.morningstar.com/NewSoc ... 62377.aspx
*Dunn's Law: "When an asset class does well, an index fund in that asset class does even better." — Steven DunnOrder of importance
As a rather sluggish slice and dice type, I think that issue versus going total stock market is way down the list of what is important in managing one's financial affairs. In order of priority, I would list what is important in the following order of priority:
1. How much you earn (the value of your human capital).
2. An intelligent insurance program.
3. Your savings rate.
4. Your allocation to stocks versus bonds.
5. Have a reasonable diversification to your portfolio (anything reasonable will do).
6. Rebalancing to manage risk.
7. Tax management.
8. International versus domestic
9. Value versus growth.
10. Small versus large.
11. Slice and dice.
After number 7, it just doesn't matter much IMO, for about 99% of investors. I say that as one who has watched the numbers pop up on my Quicken computer screen over the passing years. Some things matter a whole lot more than others as to what really influences those numbers.
https://madison.com/business/investment ... 84ca1.html
It's funny when I hear people like Bogle saying (paraphrased): "There's no need for international.. I mean the markets are so efficient that they arbitrage away all the excess overseas profit opportunity anyway!"
Yeah, gee, well you could make the same argument in reverse for why no one should expect the U.S. to perform better compared to the rest of the world in the future just because it did so in the past. And yet, in various interviews you hear him proclaiming how the U.S. is going to continue leading the rest of the world economically and how that's why our capital should be focused there. Highly self-contradictory it seems to me.
Has the order changed since then? Is it any different in 2018?
I wish I could predict the future. I can't do that, so I'll have to guess the future instead. 0% International still works for me.