November "Bogleheads On Investing" podcast with guest Jonathan Clements

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

Episode #3: Bogleheads On Investing" with guest Jonathan Clements is now available. Check with iTunes or other podcast providers, or click below:

Episode 003: Bogleheads On Investing with Jonathan Clements, hosted by Rick Ferri

Jonathan Clements is the founder and editor of HumbleDollar. During Jonathan's long career as a financial writer he has worked for Euromoney, Forbes, and The Wall Street Journal. He is also the author of eight personal finance books. His latest book is From Here to Financial Happiness.

This interesting interview dives into Jonathan's career, his books, the FIRE movement, how money can buy you happiness, investment fees and why he was an early advocate for low-cost index funds. The podcast is approximately 55 minutes long.

Enjoy,
Rick Ferri

 
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

Bumped
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Mel Lindauer »

Another great podcast, Rick. Well done; keep 'em coming.

Best regards,

Mel
Best Regards - Mel | | Semper Fi
ICH
Posts: 244
Joined: Wed Jun 13, 2018 3:08 am

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by ICH »

Perfect. Thank you.
lostdog
Posts: 5368
Joined: Thu Feb 04, 2016 1:15 pm

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by lostdog »

Great listen. Thanks for bringing up the FIRE movement and the two fund portfolio.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
User avatar
Taj_Mahalo
Posts: 93
Joined: Tue Jul 24, 2018 3:47 pm

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Taj_Mahalo »

Great podcast, Rick - thanks for sharing and thanks to Jonathan for his time.
User avatar
CollegePrudens
Posts: 208
Joined: Mon Oct 16, 2017 10:43 pm
Location: SF Bay Area

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by CollegePrudens »

Well done Rick. I have listened/read Jonathan a few times before. You explored the back stories of his experiences nicely.
We need to learn to want what we have, not to have what we want, in order to get stable and steady happiness - The 14th Dalai Lama
car733
Posts: 197
Joined: Sun Feb 25, 2018 9:07 am

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by car733 »

Did J. Clements recommended 50% of international allocation? Did I get that right?
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

Jonathan said he personally has 50% of his equity allocation in international and it has been this way for a long time.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
friar1610
Posts: 2331
Joined: Sat Nov 29, 2008 8:52 pm
Location: MA South Shore

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by friar1610 »

My dog and I enjoyed listening to the podcast during our walk this morning. Thanks, Rick.
Friar1610 | 50-ish/50-ish - a satisficer, not a maximizer
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by abuss368 »

Rick Ferri wrote: Thu Nov 08, 2018 12:31 pm Jonathan said he personally has 50% of his equity allocation in international and it has been this way for a long time.

Rick Ferri
Wow! Rick do you allocate 50% to international?
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

abuss368 wrote: Thu Nov 08, 2018 3:38 pm
Rick Ferri wrote: Thu Nov 08, 2018 12:31 pm Jonathan said he personally has 50% of his equity allocation in international and it has been this way for a long time.

Rick Ferri
Wow! Rick do you allocate 50% to international?
No. But to each is own. No way to tell if this is safer or better than 30% international or 0% international.
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
MindTheGAAP
Posts: 318
Joined: Thu Jan 30, 2014 11:44 pm

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by MindTheGAAP »

Rick Ferri wrote: Thu Nov 08, 2018 4:18 pm
abuss368 wrote: Thu Nov 08, 2018 3:38 pm
Rick Ferri wrote: Thu Nov 08, 2018 12:31 pm Jonathan said he personally has 50% of his equity allocation in international and it has been this way for a long time.

Rick Ferri
Wow! Rick do you allocate 50% to international?
No. But to each is own. No way to tell if this is safer or better than 30% international or 0% international.
Where does your recommendation fall along the spectrum then, Rick? Range is fine too, but curious as to where you land.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
MindTheGAAP
Posts: 318
Joined: Thu Jan 30, 2014 11:44 pm

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by MindTheGAAP »

Rick Ferri wrote: Thu Nov 08, 2018 4:33 pm I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
Thanks Rick - like the signature comment. Couldn't be more true on the whole life cycle.
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute" - William Feather
iamblessed
Posts: 1808
Joined: Sat Jun 09, 2018 11:52 am
Location: St. Louis

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by iamblessed »

I noticed he likes one brokerage and one bank/credit union idea.
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

iamblessed wrote: Fri Nov 09, 2018 7:15 am I noticed he likes one brokerage and one bank/credit union idea.

Yes. I like that also. Keep it simple. Sometimes it's not possible because of circumstances, but it should be what we work toward.

Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
iamblessed
Posts: 1808
Joined: Sat Jun 09, 2018 11:52 am
Location: St. Louis

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by iamblessed »

Rick Ferri wrote: Fri Nov 09, 2018 10:04 am
iamblessed wrote: Fri Nov 09, 2018 7:15 am I noticed he likes one brokerage and one bank/credit union idea.

Yes. I like that also. Keep it simple. Sometimes it's not possible because of circumstances, but it should be what we work toward.

Rick Ferri
I am not quiet there but am working on it.
User avatar
arcticpineapplecorp.
Posts: 15081
Joined: Tue Mar 06, 2012 8:22 pm

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by arcticpineapplecorp. »

Rick Ferri wrote: Thu Nov 08, 2018 4:33 pm I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
looking forward to this one. Great job so far Rick.

I'm wondering why folks are so surprised by a 50% allocation of one's equity portion to international. Owning a two fund portfolio of total world stock market index fund and total bond market index fund would have about 50% of one's equity portion in international. Even VG's target date retirement funds have 40% of the equity portion in international now which is not that far off from 50%.

So it doesn't seem so surpising to me. Merriman, and I believe at times Swedroe has said an allocation of half one's equities internationally made sense to diversify against one's human capital or maybe it was employment which is priced in in U.S. dollars.

I personally have 30% of my equity holdings in international, based on past results regarding the efficient frontier (future resuls may vary):

Image
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
User avatar
V.T
Posts: 88
Joined: Thu Jul 08, 2021 1:12 am

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by V.T »

Rick Ferri wrote: Thu Nov 08, 2018 4:33 pm I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
Rick hello!
If you think the ratio of 70 US / 30 INT is optimal for a citizen of the USA, What distribution of US/INT would you recommend to a citizen of a developing country!? (the currency of my country has been constantly falling against the dollar for a long time)
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

V.T wrote: Sun Jan 30, 2022 11:45 pm
Rick Ferri wrote: Thu Nov 08, 2018 4:33 pm I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
Rick hello!
If you think the ratio of 70 US / 30 INT is optimal for a citizen of the USA, What distribution of US/INT would you recommend to a citizen of a developing country!? (the currency of my country has been constantly falling against the dollar for a long time)
I don't know what optimal will be until I read it in the history books. That being said, I do believe for US investors that having a 30%-40% international allocation provides greater industry diversification than US stocks alone.

Rick
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
User avatar
V.T
Posts: 88
Joined: Thu Jul 08, 2021 1:12 am

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by V.T »

Rick Ferri wrote: Mon Jan 31, 2022 1:17 pm
V.T wrote: Sun Jan 30, 2022 11:45 pm
Rick Ferri wrote: Thu Nov 08, 2018 4:33 pm I've always used 30% international equity and 70% US equity as my middle-of-the-road allocation (for US investors). That split has historically worked well in the long-term.

Rick Ferri
Rick hello!
If you think the ratio of 70 US / 30 INT is optimal for a citizen of the USA, What distribution of US/INT would you recommend to a citizen of a developing country!? (the currency of my country has been constantly falling against the dollar for a long time)
I don't know what optimal will be until I read it in the history books. That being said, I do believe for US investors that having a 30%-40% international allocation provides greater industry diversification than US stocks alone.

Rick
Rick hello and thank you for the answer!
I'm trying to figure out one question: if 30-40% of international capital gives the greatest diversification for a US resident (approaching Total World Stock), then for a citizen of a developing country (Russia 0.3% of Total World Stock) can this portfolio be considered optimal (diversified)???
A lot of people will say about two key points:
1) Domestic bias - I would not like to increase my country's share in the porphyry due to the long economic lag of my country due to the actions of the leadership, poor judicial system, lack of democracy);
2) Currency risk - after studying your books and various articles, I realized that on the long horizon, the currency risk is burning down with two-way traffic, especially since the currency of my country has been falling against almost all currencies of developed countries for more than 100 years.
Rick I am very interested in your opinion on this issue, help me wake it up, thank you in advance!!!
User avatar
Topic Author
Rick Ferri
Posts: 9708
Joined: Mon Feb 26, 2007 10:40 am
Location: Georgetown, TX. Twitter: @Rick_Ferri
Contact:

Re: November "Bogleheads On Investing" podcast with guest Jonathan Clements

Post by Rick Ferri »

1) Domestic bias - People in every country are biased to their own stock market and currency. It doesn't matter what country they live in.
2) Currency risk - The US dollar is holding its own in a world where every government bond is devaluing their currency.
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
Post Reply