What is your allocation to U.S. and International?

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stimulacra
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Re: What is your allocation to U.S. and International?

Post by stimulacra » Sun Nov 25, 2018 4:16 pm

It was 85/15 (Emerging Market), that's now around 12%. Rebalance will be on 12/31.

3funder
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Re: What is your allocation to U.S. and International?

Post by 3funder » Sun Nov 25, 2018 4:23 pm

Stocks : Bonds = 80 : 20

Domestic Stock : Int'l Stock = 45 : 55

Domestic Bond : Int'l Bond = 100 : 0

pascalwager
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Re: What is your allocation to U.S. and International?

Post by pascalwager » Sun Nov 25, 2018 4:39 pm

Doc wrote:
Sun Nov 25, 2018 11:02 am
I don't think of this the way most responders do.

My equity target is 75/25 but that 25 foreign is small developed. Having large international does little for diversity because large US and large foreign are mostly international firms that are all swimming in the same pool. So you get little diversification from large foreign except for currency risk which adds nothing in the long term. I don't use EM because it would be too small a position to have any effect on my total return and I would just use sleep over what's happening with the government of WhatsThatPlace.

I have zero in foreign bonds because bond money easily flows to the country(s) with the best risk adjusted returns so all you are getting is a currency ploy which I've already addressed in my equity remarks.
Similarly, mine (int'l) looks like this at 23%:

2.0% Total Mkt
12.9% LargeValue
6.3% Small Company
1.6% Emerging Mkts

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Ged
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Re: What is your allocation to U.S. and International?

Post by Ged » Sun Nov 25, 2018 4:49 pm

Being retired I don't have the personal capital of a younger person so I am

50% (80% US Total Market/20% Ex US Total Market) equities
50% (80% Medium Term/20% Short Term) all US bonds

I guess my idea is to take my risk on the equity side of things.

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jhfenton
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Re: What is your allocation to U.S. and International?

Post by jhfenton » Sun Nov 25, 2018 4:56 pm

Stocks : Bonds :: 80 : 20

US : Ex-US :: 50 : 50

Developed Ex-US : Emerging Markets :: 50 : 50

And most of the Developed Ex-US is small cap (VSS). It was all small cap for a while, but my wife's 401(k) has Vanguard Total International Admiral Shares, so I'm putting money into that. My 401(k) has no usable international option, so it would be hard work to keep our allocation at 50% ex-US without using Total International. (I would have to continuously rebalance in one or more of our IRAs to offset the constant flow of two 401(k)s into solely US funds.)

I also have some of our bonds in Vanguard's active Emerging Markets Bond Admiral Shares (VEGBX). The fund is down 1.5% over the trailing 12 months, pretty much in line with Vanguard Total Bond Index Admiral (-1.8%). Considering how emerging markets equities have done over that time period, I am pleased.

AlphaLess
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Re: What is your allocation to U.S. and International?

Post by AlphaLess » Sun Nov 25, 2018 5:02 pm

0% international.

Only own US Total Stock and variations of US Bonds, in mutual funds.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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oldzey
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Re: What is your allocation to U.S. and International?

Post by oldzey » Sun Nov 25, 2018 5:50 pm

SoAnyway wrote:
Sun Nov 25, 2018 1:25 am
abuss368 wrote:
Sat Nov 24, 2018 3:06 pm
In relation to the never ending debate of portfolio allocation, I am interested in thoughts on the allocation between U.S. and International stocks and bonds.
OP, as you stated, the debate is never-ending. And to paraphrase Jack or Taylor or both, when the debate is never-ending, it's probably because it doesn't really matter. I've no interest in "getting into it" with anyone on what the so-called optimal answer is or might be.

To answer your question: Given my current age and personal circumstances, my AA is 60% stock/40% bonds and re-allocating toward 50-50 over the next few years per my plan. The equity component is 80/20 domestic to international and has been for decades going back to when equities were a far higher % of portfolio. I have my reasons. Perhaps I'd have been better off at 100% US or 50% US over those years. I don't know, and I don't care to know. I've no complaints.

EDIT: Oldzey, I'm as red/white/blue as they come but I sincerely hope you're not actually drinking that stuff, lol....
If we're ever in the same geography, as a public service I will happily pick up the tab on introducing you to better alternatives...
:sharebeer
oldzey wrote:
Sat Nov 24, 2018 9:35 pm
As a U.S. investor, I hold 75% U.S. equities and 25% U.S. fixed income.

So, 0% international for me! :beer

Image
Thanks for the offer, SoAnyway! Actually, I've been on the wagon since 1996.

RW&B beer was what my friends and I drank almost exclusively in college - dirt cheap, so much so that we called ourselves "The Misers".

I don't think RW&B beer is still made, which is probably a good thing, because it was pretty awful-tasting (but affordable).

If beer was an investment, I'd have a slice of international in my AA. I remember Chimay Red was very, very good ale. :beer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Sun Nov 25, 2018 6:58 pm

lostdog wrote:
Sun Nov 25, 2018 9:19 am
WanderingDoc wrote:
Sun Nov 25, 2018 12:11 am
55:45 U.S./Int'l.

Tempting to jump ship to all U.S. like others have done recently.
55:45 U.S./Int'l also.

Are you going to jump back on the ship when international does well? So tempting right?

Recency bias is a helluva drug...
Is that your way of saying that you won't be jumping ship?

I have my reasons. First off, paper assets will never be a large portion of my net worth, so it probably doesn't matter. Also, I plan to continue to expand my real estate portfolio offshore in cash-flowing residential and agriculture. Having equities exposure abroad may be moot.
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.

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Sun Nov 25, 2018 7:00 pm

staythecourse wrote:
Sun Nov 25, 2018 9:27 am
I'm 60/40, but then again I'm 100% equity outside of 1 year EF and have large slices in highly volatile asset classes so doesn't bother me for seeing underpeformance in my portfolio.

I will say my allocation to international is NOT ex U.S. developed as I don't see much difference between that at U.S. TSM. It is in more volatile segments (total international mid/ small and EM large).

Good luck.
What brokerage did you use to purchase those funds?
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.

columbia
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Re: What is your allocation to U.S. and International?

Post by columbia » Sun Nov 25, 2018 7:02 pm

oldzey wrote:
Sat Nov 24, 2018 9:35 pm
As a U.S. investor, I hold 75% U.S. equities and 25% U.S. fixed income.

So, 0% international for me! :beer

Image
I remember this from my beer can collecting days...although I was 1/2 the legal drinking age. 😛

staythecourse
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Re: What is your allocation to U.S. and International?

Post by staythecourse » Sun Nov 25, 2018 7:08 pm

WanderingDoc wrote:
Sun Nov 25, 2018 7:00 pm
staythecourse wrote:
Sun Nov 25, 2018 9:27 am
I'm 60/40, but then again I'm 100% equity outside of 1 year EF and have large slices in highly volatile asset classes so doesn't bother me for seeing underpeformance in my portfolio.

I will say my allocation to international is NOT ex U.S. developed as I don't see much difference between that at U.S. TSM. It is in more volatile segments (total international mid/ small and EM large).

Good luck.
What brokerage did you use to purchase those funds?
Just Vanguard. It is VSS and VWO.

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

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Sun Nov 25, 2018 7:13 pm

staythecourse wrote:
Sun Nov 25, 2018 7:08 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:00 pm
staythecourse wrote:
Sun Nov 25, 2018 9:27 am
I'm 60/40, but then again I'm 100% equity outside of 1 year EF and have large slices in highly volatile asset classes so doesn't bother me for seeing underpeformance in my portfolio.

I will say my allocation to international is NOT ex U.S. developed as I don't see much difference between that at U.S. TSM. It is in more volatile segments (total international mid/ small and EM large).

Good luck.
What brokerage did you use to purchase those funds?
Just Vanguard. It is VSS and VWO.

Good luck.
Thanks! I am very curious with this one. I have solely Total International in my Roth IRA. Do you have a source for me to check out that talks about what you mentioned ie. ex-U.S. developed being redundant with VTSAX? Appreciate it.
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.

staythecourse
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Re: What is your allocation to U.S. and International?

Post by staythecourse » Sun Nov 25, 2018 7:39 pm

WanderingDoc wrote:
Sun Nov 25, 2018 7:13 pm
staythecourse wrote:
Sun Nov 25, 2018 7:08 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:00 pm
staythecourse wrote:
Sun Nov 25, 2018 9:27 am
I'm 60/40, but then again I'm 100% equity outside of 1 year EF and have large slices in highly volatile asset classes so doesn't bother me for seeing underpeformance in my portfolio.

I will say my allocation to international is NOT ex U.S. developed as I don't see much difference between that at U.S. TSM. It is in more volatile segments (total international mid/ small and EM large).

Good luck.
What brokerage did you use to purchase those funds?
Just Vanguard. It is VSS and VWO.

Good luck.
Thanks! I am very curious with this one. I have solely Total International in my Roth IRA. Do you have a source for me to check out that talks about what you mentioned ie. ex-U.S. developed being redundant with VTSAX? Appreciate it.
I can give you my thought process. As you know Ex US developed large cap SHOULD provide the same return and risk as U.S. large cap. This makes sense ESPECIALLY since europe went to the EURO as a single currency which caused correlation rates to go sky high with U.S. (less currency diversification). Maybe this changes if brexit goes through?

Then you have the logic (right or wrong) of folks saying small companies foreign are likely to have a higher correlation to the economics of its home country vs. multibillion dollar foreign companies which are influenced through macroeconomic factors same as U.S. large cap. OF course, then you have small cap premium which is repeatable in all countries through time so if you believe it is there makes more sense to go small.

I have said many times on this forum a nice simple portfolio would be do the Taylor 3F, but replace it with total international small value instead. It has lower correlation, has possible small and value premiums, and adds currency diversification (against a possible falling dollar).

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

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Sun Nov 25, 2018 7:56 pm

staythecourse wrote:
Sun Nov 25, 2018 7:39 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:13 pm
staythecourse wrote:
Sun Nov 25, 2018 7:08 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:00 pm
staythecourse wrote:
Sun Nov 25, 2018 9:27 am
I'm 60/40, but then again I'm 100% equity outside of 1 year EF and have large slices in highly volatile asset classes so doesn't bother me for seeing underpeformance in my portfolio.

I will say my allocation to international is NOT ex U.S. developed as I don't see much difference between that at U.S. TSM. It is in more volatile segments (total international mid/ small and EM large).

Good luck.
What brokerage did you use to purchase those funds?
Just Vanguard. It is VSS and VWO.

Good luck.
Thanks! I am very curious with this one. I have solely Total International in my Roth IRA. Do you have a source for me to check out that talks about what you mentioned ie. ex-U.S. developed being redundant with VTSAX? Appreciate it.
I can give you my thought process. As you know Ex US developed large cap SHOULD provide the same return and risk as U.S. large cap. This makes sense ESPECIALLY since europe went to the EURO as a single currency which caused correlation rates to go sky high with U.S. (less currency diversification). Maybe this changes if brexit goes through?

Then you have the logic (right or wrong) of folks saying small companies foreign are likely to have a higher correlation to the economics of its home country vs. multibillion dollar foreign companies which are influenced through macroeconomic factors same as U.S. large cap. OF course, then you have small cap premium which is repeatable in all countries through time so if you believe it is there makes more sense to go small.

I have said many times on this forum a nice simple portfolio would be do the Taylor 3F, but replace it with total international small value instead. It has lower correlation, has possible small and value premiums, and adds currency diversification (against a possible falling dollar).

Good luck.
That makes sense to me.

I've decided to keep my Roth IRA the way it is but to put $6000 into these funds in the new year. The only problem I see is, with ETFs don't exact share amounts have to be purchased?

So if I wanted to invest $6K into VSS and VWO, how would this even work? Also, I didn't see a International small cap value fund on the Vanguard comparison tool.
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.

wesgreen
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Re: What is your allocation to U.S. and International?

Post by wesgreen » Sun Nov 25, 2018 8:20 pm

I wonder how much longer until we'll see someone at Vanguard lose their job or pay a price for steering people into INTL. the way they did and do. It did make a big difference in the long run, and it cost me and many others a big chunk of our retirement we'll never get back. And after all these decades, they still try to persuade you to move 30-50% into INTL., every time you open their app. I don't think the inevitable reckoning is too far off. They should have listened to Bogle.

jmanter
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Re: What is your allocation to U.S. and International?

Post by jmanter » Sun Nov 25, 2018 8:20 pm

Equity:Bond = 82:18
US:ex-US = 79:21
Bond = 100 US

Over the next 25 years, around 80:20 US to International will probably not perform as well as 100% US...OR...it will probably not perform as well as whatever the exact market weight is. But it will probably perform a bit better than either 100% US...OR... whatever the exact market weight is.

I'm comfortable with that.

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Re: What is your allocation to U.S. and International?

Post by rnitz » Sun Nov 25, 2018 8:30 pm

abuss368,

Currently 70/30 (US equities/Int'l equities). Was closer to 60/40 as a target, but recent under-performance of Int'l (and tax drag to rebalance) has it is what it is.

If I remember correctly, the last poll of bogleheads (back when they allowed polls) was that only about 5% had no Int'l equities. Doesn't seem to jibe with the earnestness of various posters recently.

columbia
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Re: What is your allocation to U.S. and International?

Post by columbia » Sun Nov 25, 2018 8:34 pm

wesgreen wrote:
Sun Nov 25, 2018 8:20 pm
I wonder how much longer until we'll see someone at Vanguard lose their job or pay a price for steering people into INTL. the way they did and do. It did make a big difference in the long run, and it cost me and many others a big chunk of our retirement we'll never get back. And after all these decades, they still try to persuade you to move 30-50% into INTL., every time you open their app. I don't think the inevitable reckoning is too far off. They should have listened to Bogle.
I don’t know about other outlets, but CREF Stock is still holding steady at 30% international. I was pretty surprised when VG moved the affected funds to 40%.

staythecourse
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Re: What is your allocation to U.S. and International?

Post by staythecourse » Sun Nov 25, 2018 8:37 pm

WanderingDoc wrote:
Sun Nov 25, 2018 7:56 pm
staythecourse wrote:
Sun Nov 25, 2018 7:39 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:13 pm
staythecourse wrote:
Sun Nov 25, 2018 7:08 pm
WanderingDoc wrote:
Sun Nov 25, 2018 7:00 pm


What brokerage did you use to purchase those funds?
Just Vanguard. It is VSS and VWO.

Good luck.
Thanks! I am very curious with this one. I have solely Total International in my Roth IRA. Do you have a source for me to check out that talks about what you mentioned ie. ex-U.S. developed being redundant with VTSAX? Appreciate it.
I can give you my thought process. As you know Ex US developed large cap SHOULD provide the same return and risk as U.S. large cap. This makes sense ESPECIALLY since europe went to the EURO as a single currency which caused correlation rates to go sky high with U.S. (less currency diversification). Maybe this changes if brexit goes through?

Then you have the logic (right or wrong) of folks saying small companies foreign are likely to have a higher correlation to the economics of its home country vs. multibillion dollar foreign companies which are influenced through macroeconomic factors same as U.S. large cap. OF course, then you have small cap premium which is repeatable in all countries through time so if you believe it is there makes more sense to go small.

I have said many times on this forum a nice simple portfolio would be do the Taylor 3F, but replace it with total international small value instead. It has lower correlation, has possible small and value premiums, and adds currency diversification (against a possible falling dollar).

Good luck.
That makes sense to me.

I've decided to keep my Roth IRA the way it is but to put $6000 into these funds in the new year. The only problem I see is, with ETFs don't exact share amounts have to be purchased?

So if I wanted to invest $6K into VSS and VWO, how would this even work? Also, I didn't see a International small cap value fund on the Vanguard comparison tool.
VSS is more a total international mid/ small blend. Yes ETF have to be full share purchase. Why not just buy the mutual fund equivalents?

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

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JonnyDVM
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Re: What is your allocation to U.S. and International?

Post by JonnyDVM » Sun Nov 25, 2018 8:58 pm

60/40 with the 10% imbalance driven by jingoism.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

andrew99999
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Re: What is your allocation to U.S. and International?

Post by andrew99999 » Sun Nov 25, 2018 9:03 pm

GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.
PassiveInvestingAustralia.com

harvestbook
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Re: What is your allocation to U.S. and International?

Post by harvestbook » Sun Nov 25, 2018 9:15 pm

Last I broke it down, it's 90/10 overall.

Stocks; US 55/Intl 45

Bonds: US 90/ Intl 10 (the 10 comes from the portions in target date and Lifestrategy funds).

As I roll over and adjust my 401k's in light of Vanguard's admiral-shares change, I'll probably just go 60/30/10 and have no international bonds.
I'm not smart enough to know, and I can't afford to guess.

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Sun Nov 25, 2018 9:21 pm

harvestbook wrote:
Sun Nov 25, 2018 9:15 pm
Last I broke it down, it's 90/10 overall.

Stocks; US 55/Intl 45

Bonds: US 90/ Intl 10 (the 10 comes from the portions in target date and Lifestrategy funds).

As I roll over and adjust my 401k's in light of Vanguard's admiral-shares change, I'll probably just go 60/30/10 and have no international bonds.
I'm glad there are a lot of 55:45 U.S.:Int'l allocations. Makes me feel like less of an idiot 8-)
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.

columbia
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Re: What is your allocation to U.S. and International?

Post by columbia » Sun Nov 25, 2018 9:25 pm

andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.

1/2 Total Stock Market
1/2 Total World

Pretty easy to maintain.

cryptormorf
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Re: What is your allocation to U.S. and International?

Post by cryptormorf » Sun Nov 25, 2018 11:04 pm

70% Total Stock Market
30% Total Bond Market

0% international

(Will be shifting to 80/20 over the next year)
Last edited by cryptormorf on Tue Nov 27, 2018 1:02 am, edited 1 time in total.

pascalwager
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Re: What is your allocation to U.S. and International?

Post by pascalwager » Mon Nov 26, 2018 1:04 am

columbia wrote:
Sun Nov 25, 2018 9:25 pm
andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.

1/2 Total Stock Market
1/2 Total World

Pretty easy to maintain.
Siamond did a study paper on this combination using different amounts of home bias. There's a link in one of his post's, I think, and it may be in the wiki, but I haven't found it yet.

goblue100
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Re: What is your allocation to U.S. and International?

Post by goblue100 » Mon Nov 26, 2018 7:19 am

wesgreen wrote:
Sun Nov 25, 2018 8:20 pm
I wonder how much longer until we'll see someone at Vanguard lose their job or pay a price for steering people into INTL. the way they did and do. It did make a big difference in the long run, and it cost me and many others a big chunk of our retirement we'll never get back. And after all these decades, they still try to persuade you to move 30-50% into INTL., every time you open their app. I don't think the inevitable reckoning is too far off. They should have listened to Bogle.
I think you are confusing outcome with strategy. The strategy is sound. US has performed much better and international has not had its turn in the sun lately, but it could happen. Maybe sooner than later.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

asif408
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Re: What is your allocation to U.S. and International?

Post by asif408 » Mon Nov 26, 2018 8:34 am

abuss368 wrote:
Sun Nov 25, 2018 11:24 am
asif408 wrote:
Sun Nov 25, 2018 8:25 am
10% US/90% international
Hi asif408 -

Is your post correct? You allocate 90% to international stock?

Best.
Yes, it is correct.

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

Re: What is your allocation to U.S. and International?

Post by columbia » Mon Nov 26, 2018 9:03 am

pascalwager wrote:
Mon Nov 26, 2018 1:04 am
columbia wrote:
Sun Nov 25, 2018 9:25 pm
andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.

1/2 Total Stock Market
1/2 Total World

Pretty easy to maintain.
Siamond did a study paper on this combination using different amounts of home bias. There's a link in one of his post's, I think, and it may be in the wiki, but I haven't found it yet.

It does seem that the 1/n approach is just psychologically easier. It works for me, although others are perfectly fine with a more free form slice and dice.

Whatever keeps you on path. 😀

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Re: What is your allocation to U.S. and International?

Post by ZumZabo » Mon Nov 26, 2018 10:01 am

Just finished reading this topic. Interesting to see what others are actually doing rather than just theory. Thanks to all for sharing. Responding to the opening post:

I am 58 yrs old and was 100% stocks until 3 years ago and used some harvested losses to re allocate to 67/33 stock/bond. I needed to reduce risk relative to my age. I currently feel under exposed to equities but will still benefit from them in good times. Probably a function of recency due to a long bull market. I might feel like a genius if we get a big down market.
Was:
10% VV (large blend)
20% VO (mid blend)
10% VB (small blend)
10 VHT (health care index)
50% VEU (all world ex US)
Due to market performance I’m currently 54/46 domestic/ int’l

As I mentioned in another thread in which I was looking for advice concerning private health insurance, I am intentionally under employed or “Funemployed”. The reason for that side track is to say that my earned income is low at the time and that has created a really good opportunity to tax gain harvest quite a bit. As I am picking off the gains, I am constructing a three fund portfolio with the proceeds. Large blend, small blend and some of mid blend are sold and placed in total stock. I’ve been doing this for three years and in another three or four I will be finished. Healthcare will be the most difficult to break up with. We’ve been together for decades in some form (fund or etf) with really good results. I will still maintain a 50/50 mix dom/int’l. 1/3 total stock market 1/3 total international 1/3 intermediate term bond with a 67/33 stock/bond (some rounding involved) I know international has not done well but I don’t know the future, I never have. I think it was Peter Bernstein who said “If you are comfortable with everything you own then you are not truly diversified “. My paraphrase.
I have given thought to int’l bonds but haven’t found them compelling enough to pull the trigger plus I have more activity than I want in the portfolio currently with recent rebalance and gain harvesting. When I get to my three fund portfolio and there is nothing left to do, I may look deeper into international bonds. I’m not in a hurry.
Last edited by ZumZabo on Mon Nov 26, 2018 10:28 am, edited 1 time in total.
What made me think I could start clean slated? The hardest to learn was the least complicated: Emily Saliers / And if I claim to be a wise man, it surely means that I don't know: Kerry Livgren

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UpsetRaptor
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Re: What is your allocation to U.S. and International?

Post by UpsetRaptor » Mon Nov 26, 2018 10:23 am

Stocks : Bonds = 75:25
US : International stock = 67:33
Domestic : International Bonds = 100 : 0

pascalwager
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Re: What is your allocation to U.S. and International?

Post by pascalwager » Mon Nov 26, 2018 2:56 pm

pascalwager wrote:
Mon Nov 26, 2018 1:04 am
columbia wrote:
Sun Nov 25, 2018 9:25 pm
andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.

1/2 Total Stock Market
1/2 Total World

Pretty easy to maintain.
Siamond did a study paper on this combination using different amounts of home bias. There's a link in one of his post's, I think, and it may be in the wiki, but I haven't found it yet.
Here's siamond's world portfolio study, Part 1:

https://finpage.blog/2017/03/18/investi ... ld-part-1/

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Tycoon
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Re: What is your allocation to U.S. and International?

Post by Tycoon » Mon Nov 26, 2018 4:21 pm

0% international
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. I see the world as it is; not how I wish it to be.

GAAP
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Re: What is your allocation to U.S. and International?

Post by GAAP » Tue Nov 27, 2018 10:13 am

andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.
Sorry, misread and thought you wanted to maintain a constant ratio between US and ex-US, not US and global-weighted. Should have had more coffee that morning...

The Casualty
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Re: What is your allocation to U.S. and International?

Post by The Casualty » Tue Nov 27, 2018 11:45 am

5% International/45% Domestic/35% Bonds/15% Cash - CD's.

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pokebowl
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Re: What is your allocation to U.S. and International?

Post by pokebowl » Tue Nov 27, 2018 7:56 pm

abuss368 wrote:
Sat Nov 24, 2018 3:06 pm


Are there Bogleheads who allocate 50% to U.S. and 50% to International?

I'll raise my hand here, though I'll caveat that is was only true in 2017. For me I allocate my equities at market weight, meaning depending on what the markets do I'll align new contributions accordingly into VTSAX and VTIAX, however after that I let it ride with no rebalancing needed. Currently its at 55% US to 46% ex-US which falls roughly in line with the FTSE and MSCI indexes. These are the indexes I use to look up current weights and allocate accordingly. /my two cents
Nullius in verba.

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Peter Foley
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Re: What is your allocation to U.S. and International?

Post by Peter Foley » Tue Nov 27, 2018 9:09 pm

Desired allocation (real allocation floats a bit with the market).

Equities: 85% Total US Stock Market / 15% Total International

Non equities: 100% US

That is a direct answer to the question. However, one might also consider the fact that many US companies have significant foreign holdings.

ibhhvc
Posts: 97
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Re: What is your allocation to U.S. and International?

Post by ibhhvc » Tue Nov 27, 2018 9:26 pm

93% of equities in Total World and 7% of equities in Vanguard Global Minimum Volatility so about 58% US and 42% ex-US right now, although it was 50/50 not that long ago...

Daitokuji
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Re: What is your allocation to U.S. and International?

Post by Daitokuji » Tue Nov 27, 2018 9:37 pm

100% stocks.

60% VTI
40% VXUS

That is my 2 fund portfolio

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aj76er
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Re: What is your allocation to U.S. and International?

Post by aj76er » Tue Nov 27, 2018 11:00 pm

columbia wrote:
Sun Nov 25, 2018 9:25 pm
andrew99999 wrote:
Sun Nov 25, 2018 9:03 pm
GAAP wrote:
Sun Nov 25, 2018 12:07 pm
andrew99999 wrote:
Sat Nov 24, 2018 11:48 pm
The problem with 50/50 is the same problem as 60/40 and 70/30. They all depend on reversion to some sort of mean.
Look at the US proportion from 1900. It was around 15% of the world markets. If you then decided then 15:85 was the "correct" long term ratio and rebalanced it back to that each year, you would have missed out on a lot of money.
The other way would be to use market capitalisation and let the market determine it.
Or you could do a combo. I quite like the idea of 25% home country + 75% global cap weighted. For US this comes to around 2:1 but will still sway in the direction of market cap changes.
Global weighted is easy to do. Specific ratios are easy to do. Your suggestion sounds reasonable, but I'm not aware of any funds of that sort, making it a repeated manual process. It's a shame really, I suspect that many with a preference against international might like a way to add it to their portfolio in a defined ratio that is automatically managed.
Actually It'd be the same amount of work as a constant proportion, only instead of a constant proportion between US and ExUS, it would be a constant proportion between US and All World.

1/2 Total Stock Market
1/2 Total World

Pretty easy to maintain.
Nice to see some other like-minded individuals :-).

My equity allocation:

1/3 Total U.S. Stock Market
2/3 Total World Stock Market

Saimond's study (posted by pascalwager upthread) inspired me to think this way about my equity asset allocation.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

drk
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Re: What is your allocation to U.S. and International?

Post by drk » Tue Nov 27, 2018 11:02 pm

50/50

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skipper
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Re: What is your allocation to U.S. and International?

Post by skipper » Tue Nov 27, 2018 11:18 pm

Stocks:Bonds --> 65:35
US:International stock --> 77:23
Domestic:International Bonds --> 100:0

Notes:
  • My own personal distillation of Guide to Investing*, Common Sense Investing, and this forum.
  • I decided to do it loosely "by the book", so to speak, for better or worse.
  • I don't think there will ever be a market to outperform the US in the long run until kingdom come.
  • Therefore, it probably makes no sense to invest in international.**
  • If no one invested in international, then the US market might further dominate.
*I don't think the International AA changed for any of the sample portfolios from the 2006 to the 2014 editions.
**The ER on my International fund is almost twice that of my US fund.
Last edited by skipper on Tue Nov 27, 2018 11:35 pm, edited 1 time in total.
You know what; you're right. Let's do it the dumbest way possible.

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Socrates
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@ Stay the course: International small value

Post by Socrates » Tue Nov 27, 2018 11:24 pm

I have said many times on this forum a nice simple portfolio would be do the Taylor 3F, but replace it with total international small value instead.
what are your thoughts on DLS Wisdom Tree International Small Cap Value. I don't have access to much of anything in my 403(b) along those lines, but have an IRA where I could add the small international small value and have recently added DLS.

My international is 20%, but I too am looking at just the small cap value part of international or perhaps a International large and small value mix
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

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stemikger
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Re: What is your allocation to U.S. and International?

Post by stemikger » Wed Nov 28, 2018 12:19 am

Balanced Index Fund
0% international
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

percy
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Re: What is your allocation to U.S. and International?

Post by percy » Wed Nov 28, 2018 12:32 am

Has this been posted yet? Didn't see it...

International stocks will beat US stocks over next decade: Vanguard Group

"The US stock market has produced annualized returns over 10 percent in recent years.

That has resulted in many investors who use traditional asset allocation to be overweight U.S. stocks, and it is a risk if they do not rebalance, according to Vanguard.

International stocks will outperform domestic equities in the next decade."



https://www.cnbc.com/2018/11/27/interna ... guard.html

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skipper
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Re: What is your allocation to U.S. and International?

Post by skipper » Wed Nov 28, 2018 12:57 am

Sounds like one of those bold, finger in the wind statements meant to drive investors off course. A siren song from Vanguard? Maybe.

"Will" is a strong word.
You know what; you're right. Let's do it the dumbest way possible.

WanderingDoc
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Re: What is your allocation to U.S. and International?

Post by WanderingDoc » Wed Nov 28, 2018 1:20 am

percy wrote:
Wed Nov 28, 2018 12:32 am
Has this been posted yet? Didn't see it...

International stocks will beat US stocks over next decade: Vanguard Group

"The US stock market has produced annualized returns over 10 percent in recent years.

That has resulted in many investors who use traditional asset allocation to be overweight U.S. stocks, and it is a risk if they do not rebalance, according to Vanguard.

International stocks will outperform domestic equities in the next decade."



https://www.cnbc.com/2018/11/27/interna ... guard.html
I don't want to wait a decade. Thats too long to see if your hunch payed off, even if it does.
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.

RetiredCSProf
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Re: What is your allocation to U.S. and International?

Post by RetiredCSProf » Wed Nov 28, 2018 2:04 am

Advisors at TRP and Fido both recommended that I keep 30% of my equities in international. It's probably the only AA area where they agreed. Neither gave a recommendation on AA of emerging versus developed markets. TRP advisor recommended that I keep 15% of my bond funds in international, split evenly between developed and emerging market bonds.

My international equities dropped this year to 20% of my equities -- I may bring it back up to 25%.

fennewaldaj
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Re: What is your allocation to U.S. and International?

Post by fennewaldaj » Wed Nov 28, 2018 2:37 am

WanderingDoc wrote:
Wed Nov 28, 2018 1:20 am
percy wrote:
Wed Nov 28, 2018 12:32 am
Has this been posted yet? Didn't see it...

International stocks will beat US stocks over next decade: Vanguard Group

"The US stock market has produced annualized returns over 10 percent in recent years.

That has resulted in many investors who use traditional asset allocation to be overweight U.S. stocks, and it is a risk if they do not rebalance, according to Vanguard.

International stocks will outperform domestic equities in the next decade."



https://www.cnbc.com/2018/11/27/interna ... guard.html
I don't want to wait a decade. Thats too long to see if your hunch payed off, even if it does.
The idea at least for me is one doesn't have to have hunches. What ever side does better I will be fine.

s8r
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Re: What is your allocation to U.S. and International?

Post by s8r » Wed Nov 28, 2018 5:19 am

European investor here.

I have a very strong gut feeling that the U.S. will continue to be the dominant economy in the world for at least my lifetime. However, managing your money using your gut feeling is foolish. Logic and probability says it is unwise to invest in a single country.

Global market cap for me. It is so obvious when you set your emotions aside.

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