Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rick Ferri » Sun Dec 29, 2019 9:45 am

Click on the link below to listen:

Episode 017: Joe Davis, host Rick Ferri

Joseph "Joe" Davis, Ph.D., is a principal and Vanguard's global chief economist. He is also head of Vanguard Investment Strategy Group, whose research team is responsible for helping to oversee the firm's investment methodologies and asset allocation strategies for both institutional and individual investors. In addition, he is a member of the senior portfolio management team for the Vanguard Fixed Income Group. Joe earned his Ph.D. in macroeconomics and finance at Duke University.

Our discussion centers on a new report, Vanguard economic and market outlook for 2020: The new age of uncertainty, published by the Vanguard Global Economics and Capital Markets Outlook Team.

Happy New Year!

Rick Ferri
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rick Ferri » Sun Dec 29, 2019 11:39 am

Bumped to the top.
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by whodidntante » Sun Dec 29, 2019 11:42 am

Did you tell Joe that "nobody knows nothin'?" Just kidding.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rick Ferri » Sun Dec 29, 2019 12:41 pm

Listen to the podcast and you will find out!

:D
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by HueyLD » Sun Dec 29, 2019 12:43 pm

Another great choice, Rick. Look forward to Mr. Davis’ comments.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by WhyNotUs » Sun Dec 29, 2019 12:49 pm

65 employees working on active investing analysis, there's where some of the money is going instead of reduced fees.
I own the next hot stock- VTSAX

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rick Ferri » Sun Dec 29, 2019 3:33 pm

WhyNotUs wrote:
Sun Dec 29, 2019 12:49 pm
65 employees working on active investing analysis, there's where some of the money is going instead of reduced fees.
I don't have a breakdown of the revenues vs. cost;' however, in defense of Vanguard, institutional investors pay Vanguard hard dollars for this research, and a portion of the active management fees from the active funds this research supports is allocated to the economics group.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by ronno2018 » Sun Dec 29, 2019 3:36 pm

I am really enjoying the podcasts, thanks for doing them!!!
:sharebeer

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by fishandgolf » Sun Dec 29, 2019 4:04 pm

ronno2018 wrote:
Sun Dec 29, 2019 3:36 pm
I am really enjoying the podcasts, thanks for doing them!!!
:sharebeer
+1000

Thank you Rick!! Happy New Year!

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by DB2 » Sun Dec 29, 2019 4:46 pm

Rick, I enjoyed the podcast and appreciate passing along the questions asked from the other thread.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by renegade06 » Sun Dec 29, 2019 5:05 pm

Rick, I greatly enjoyed the podcast. Thanks!

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rick Ferri » Sun Dec 29, 2019 5:10 pm

DB2 wrote:
Sun Dec 29, 2019 4:46 pm
Rick, I enjoyed the podcast and appreciate passing along the questions asked from the other thread.
Thanks. I try to either incorporate Boglehead questions into my questions during the podcast or I ask them at the end. Either way, most questions get in if they're broad enough and relevant.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by columbia » Sun Dec 29, 2019 5:14 pm

Mr. Davis is not the first person I’ve heard express concerns over the current corporate debt market. I don’t own any. :)

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by book lover » Sun Dec 29, 2019 5:14 pm

Thanks for the superb podcasts Rick, lots of great questions and interesting answers.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by L82GAME » Sun Dec 29, 2019 6:53 pm

book lover wrote:
Sun Dec 29, 2019 5:14 pm
Thanks for the superb podcasts Rick, lots of great questions and interesting answers.
Agreed! The podcasts are a great service, thank you.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by dharrythomas » Sun Dec 29, 2019 8:28 pm

Rick, Another great podcast. I’d vote in favor of making it an annual event. I downloaded the forecast to read this week. Thanks and Happy New Year.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by abuss368 » Sun Dec 29, 2019 8:29 pm

Thanks Rick!

Happy New Year!
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by wesgreen » Sun Dec 29, 2019 10:08 pm

I'd like to know who at Vanguard will accept responsibility for their aggressive pushing of investors into imternational stocks, which has forced many to have to postpone retirement. And when, and how.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by lazyday » Mon Dec 30, 2019 6:47 am

wesgreen wrote:
Sun Dec 29, 2019 10:08 pm
I'd like to know who at Vanguard will accept responsibility for their aggressive pushing of investors into imternational stocks, which has forced many to have to postpone retirement. And when, and how.
My buddy Rich was 100% in Tech stocks, and Vanguard's terrible advice to diversify cost him his retirement.

We want revenge!

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by columbia » Mon Dec 30, 2019 7:18 am

That has to be the most bizarre trope I’ve seen here. Oy vey.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Eric76 » Mon Dec 30, 2019 7:19 am

I'm sure Joe Davis is a sharp guy, but his market outlook for 2020 is as useful to me as a screen door on a submarine.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Stinky » Mon Dec 30, 2019 7:57 am

dharrythomas wrote:
Sun Dec 29, 2019 8:28 pm
Rick, Another great podcast. I’d vote in favor of making it an annual event. I downloaded the forecast to read this week. Thanks and Happy New Year.
+1

I think that hearing Vanguard’s updated view on the economy and the markets each December is an excellent idea.

I expect that most Bogleheads collect information and opinions from many sources. Having this data point from Vanguard is just one more opinion to throw into the mix.
It's a GREAT day to be alive - Travis Tritt

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by dogagility » Mon Dec 30, 2019 9:17 am

Stinky wrote:
Mon Dec 30, 2019 7:57 am
dharrythomas wrote:
Sun Dec 29, 2019 8:28 pm
Rick, Another great podcast. I’d vote in favor of making it an annual event. I downloaded the forecast to read this week. Thanks and Happy New Year.
+1

I think that hearing Vanguard’s updated view on the economy and the markets each December is an excellent idea.

I expect that most Bogleheads collect information and opinions from many sources. Having this data point from Vanguard is just one more opinion to throw into the mix.
Any financial porn (short-term forecast) is entertaining, but I would never base my investment decisions on such "information".
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by ClevrChico » Mon Dec 30, 2019 10:42 am

This is one of my favorite podcasts so far! Thanks, Rick and Joe!

There's so much good information and thought in this.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by cashboy » Mon Dec 30, 2019 12:51 pm

:thumbsup
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by sleepysurf » Mon Dec 30, 2019 3:19 pm

Interesting podcast. However, I'd like to know how all of his prior annual economic/financial forecasts fared vs. what really happened!
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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by ThereAreNoGurus » Mon Dec 30, 2019 4:10 pm

sleepysurf wrote:
Mon Dec 30, 2019 3:19 pm
I'd like to know how all of his prior annual economic/financial forecasts fared vs. what really happened!
I've always thought this. Most forecasts are just entertainment value, at best, for me.
Trade the news and you will lose.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by nedsaid » Tue Dec 31, 2019 3:57 pm

There is a lot of disrespect out there for economists and their forecasts. While I understand that forecasting is often a futile exercise, I like to hear about what is happening in the economy. It is sort of a snapshot of how things are right now and current trends in the economy. This is useful information but again because the economy and the markets are dynamic, forecasting is difficult. I don't know, it always seemed better to me to be informed rather than to just throw up the hands and say nobody knows nothing. It just seems like a copout to me.

Companies make forecasts all of the time. No reason to gear up to make a product or provide a service if you have no idea if anyone will buy. There is such a thing as market research and by golly it is useful. But again, nothing is foolproof and nothing is certain. But an educated guess is better than an uneducated guess. Shoot, a certain amount of forecasting happens when you ask someone to marry you. People do not set out to have unsuccessful marriages or dysfunctional families. By golly, I am going to plan to fail today.

I used to enjoy hearing former U.S. Bank Chief Economist John Mitchell come and give his annual talk to our Rotary Club in Corvallis, Oregon. He was entertaining as well as very informative.
A fool and his money are good for business.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by stan1 » Tue Dec 31, 2019 4:11 pm

nedsaid wrote:
Tue Dec 31, 2019 3:57 pm
There is a lot of disrespect out there for economists and their forecasts. While I understand that forecasting is often a futile exercise, I like to hear about what is happening in the economy. It is sort of a snapshot of how things are right now and current trends in the economy. This is useful information but again because the economy and the markets are dynamic, forecasting is difficult. I don't know, it always seemed better to me to be informed rather than to just throw up the hands and say nobody knows nothing. It just seems like a copout to me.

Companies make forecasts all of the time. No reason to gear up to make a product or provide a service if you have no idea if anyone will buy. There is such a thing as market research and by golly it is useful. But again, nothing is foolproof and nothing is certain. But an educated guess is better than an uneducated guess. Shoot, a certain amount of forecasting happens when you ask someone to marry you. People do not set out to have unsuccessful marriages or dysfunctional families. By golly, I am going to plan to fail today.

I used to enjoy hearing former U.S. Bank Chief Economist John Mitchell come and give his annual talk to our Rotary Club in Corvallis, Oregon. He was entertaining as well as very informative.
Well said, I don't envy anyone whose career is based even in part on modeling human behavior.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by willthrill81 » Tue Dec 31, 2019 4:22 pm

nedsaid wrote:
Tue Dec 31, 2019 3:57 pm
There is a lot of disrespect out there for economists and their forecasts. While I understand that forecasting is often a futile exercise, I like to hear about what is happening in the economy. It is sort of a snapshot of how things are right now and current trends in the economy. This is useful information but again because the economy and the markets are dynamic, forecasting is difficult. I don't know, it always seemed better to me to be informed rather than to just throw up the hands and say nobody knows nothing. It just seems like a copout to me.

Companies make forecasts all of the time. No reason to gear up to make a product or provide a service if you have no idea if anyone will buy. There is such a thing as market research and by golly it is useful. But again, nothing is foolproof and nothing is certain. But an educated guess is better than an uneducated guess. Shoot, a certain amount of forecasting happens when you ask someone to marry you. People do not set out to have unsuccessful marriages or dysfunctional families. By golly, I am going to plan to fail today.

I used to enjoy hearing former U.S. Bank Chief Economist John Mitchell come and give his annual talk to our Rotary Club in Corvallis, Oregon. He was entertaining as well as very informative.
I agree. Even the most diehard BH is making projections for the future built around a set of assumptions, no matter what they decide to do or not do.

There is a spectrum of possible responses than individual investor could take with regard to economic information, ranging from doing nothing (i.e. the Boglehead way, stay the course) to trying to make pinpoint determinations of an individual security's value and going 'all in' on it being accurate (the most extreme example I can readily think of), with myriad choices between. In truth, I tilt somewhat toward the 'do nothing' camp even though I am a trend follower. My system only uses index funds, and one of the criteria behind my selecting it is that it produces minimal trades, particularly moving out of stocks, because I believe that the 'correct' bias for me at least is to be invested wholly in stocks at my age.

I seriously question those who think that they can accurate forecast what will happen in the future (i.e. the S&P 500 will close at X on Y date). But I give far more credence to those who make such forecasts on the basis of solid and simple analysis to produce a range of plausible possibilities.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by nedsaid » Tue Dec 31, 2019 4:26 pm

willthrill81 wrote:
Tue Dec 31, 2019 4:22 pm
nedsaid wrote:
Tue Dec 31, 2019 3:57 pm
There is a lot of disrespect out there for economists and their forecasts. While I understand that forecasting is often a futile exercise, I like to hear about what is happening in the economy. It is sort of a snapshot of how things are right now and current trends in the economy. This is useful information but again because the economy and the markets are dynamic, forecasting is difficult. I don't know, it always seemed better to me to be informed rather than to just throw up the hands and say nobody knows nothing. It just seems like a copout to me.

Companies make forecasts all of the time. No reason to gear up to make a product or provide a service if you have no idea if anyone will buy. There is such a thing as market research and by golly it is useful. But again, nothing is foolproof and nothing is certain. But an educated guess is better than an uneducated guess. Shoot, a certain amount of forecasting happens when you ask someone to marry you. People do not set out to have unsuccessful marriages or dysfunctional families. By golly, I am going to plan to fail today.

I used to enjoy hearing former U.S. Bank Chief Economist John Mitchell come and give his annual talk to our Rotary Club in Corvallis, Oregon. He was entertaining as well as very informative.
I agree. Even the most diehard BH is making projections for the future built around a set of assumptions, no matter what they decide to do or not do.

There is a spectrum of possible responses than individual investor could take with regard to economic information, ranging from doing nothing (i.e. the Boglehead way, stay the course) to trying to make pinpoint determinations of an individual security's value and going 'all in' on it being accurate (the most extreme example I can readily think of), with myriad choices between. In truth, I tilt somewhat toward the 'do nothing' camp even though I am a trend follower. My system only uses index funds, and one of the criteria behind my selecting it is that it produces minimal trades, particularly moving out of stocks, because I believe that the 'correct' bias for me at least is to be invested wholly in stocks at my age.

I seriously question those who think that they can accurate forecast what will happen in the future (i.e. the S&P 500 will close at X on Y date). But I give far more credence to those who make such forecasts on the basis of solid and simple analysis to produce a range of plausible possibilities.
Even dating is a form of forecasting, you are making predictions of a range of positive outcomes for a relationship. Not so likely to get married if you think the relationship is doomed to failure.
A fool and his money are good for business.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by bikechuck » Wed Jan 01, 2020 6:09 pm

I just listened to the podcast and it has me questioning the international equity slice of my asset allocation. My current target is to have 20 percent of my equities in international. Mr. Davis made an argument that I found compelling for 40%.

I need to noodle on this for a while but I am giving serious consideration to increasing my international equities from 20% to 30% of my equity holdings.

It would have been interesting to hear him speak a bit more about his outlook for emerging markets and how that might differ from total international going forward.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by willthrill81 » Wed Jan 01, 2020 6:13 pm

bikechuck wrote:
Wed Jan 01, 2020 6:09 pm
I just listened to the podcast and it has me questioning the international equity slice of my asset allocation. My current target is to have 20 percent of my equities in international. Mr. Davis made an argument that I found compelling for 40%.

I need to noodle on this for a while but I am giving serious consideration to increasing my international equities from 20% to 30% of my equity holdings.
Just to play devil's advocate, many like Mr. Davis have been making the 'pro-international stock' argument for years, yet they have, so far at least, been wrong. At some point, international stock will certainly outperform the U.S. again, and it could indeed start tomorrow.

IMHO, it's very important for you to be truly committed to your investment strategy. If listening to a single person is enough to make you seriously consider changing it, you might not be adequately committed. The danger is that you'll move into international stock, believing it to have a good chance of doing something good for you, and if it doesn't do that, you go back to where you were before at the worst possible time. So think long and hard about making any decisions regarding major changes in your strategy.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by bck63 » Wed Jan 01, 2020 6:16 pm

Enjoyed the podcast Rick. Thank you.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Rowan Oak » Wed Jan 01, 2020 7:57 pm

willthrill81 wrote:
Wed Jan 01, 2020 6:13 pm
bikechuck wrote:
Wed Jan 01, 2020 6:09 pm
I just listened to the podcast and it has me questioning the international equity slice of my asset allocation. My current target is to have 20 percent of my equities in international. Mr. Davis made an argument that I found compelling for 40%.

I need to noodle on this for a while but I am giving serious consideration to increasing my international equities from 20% to 30% of my equity holdings.
Just to play devil's advocate, many like Mr. Davis have been making the 'pro-international stock' argument for years, yet they have, so far at least, been wrong. At some point, international stock will certainly outperform the U.S. again, and it could indeed start tomorrow.

IMHO, it's very important for you to be truly committed to your investment strategy. If listening to a single person is enough to make you seriously consider changing it, you might not be adequately committed. The danger is that you'll move into international stock, believing it to have a good chance of doing something good for you, and if it doesn't do that, you go back to where you were before at the worst possible time. So think long and hard about making any decisions regarding major changes in your strategy.

I agree. At least give it 60 days or so before making any changes.

And about Vanguard's market predictions, just another flip of the coin.
Stick to your plan.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by bikechuck » Thu Jan 02, 2020 11:36 am

Thanks Willthrill and Rowan Oak, I agree that I should be cautious about changes to my targeted allocation which is why I intend to noodle on this a bit before taking any action. That said my allocation is something that I have not adjusted for many years and choosing 20% was somewhat arbitrary.

If I do make a change I do not think that it will be due to market timing (which neither of you accused me of but something that I know that I need to be on guard against), rather it will be more of a strategic decision that I would likely make once and stick with for the remainder of my life. Mr. Davis' comments that holding 40% international is something of a sweet spot that reduces volatility impressed me.

I am currently at 20% and after the podcast I am considering moving to 25% or 30%. Then if he is correct that international equities are likely to outperform U.S. my percentage would naturally creep up a bit because I do almost no trading and I don't really re balance other than taking withdrawals from my index funds that have been growing the most. Then if my international mix does creep up I would likely not re balance until and unless the international mix grew to over 40%.

I might also decide to do nothing which often can be the best course of action. At any rate I am thankful for the podcast and it is good to occasionally rethink your strategy as long as you do not do it too frequently.

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by geniekid » Thu Jan 02, 2020 2:47 pm

I appreciated hearing Mr. Davis' views on negative interest rates, international investing, and asset allocation in the face of possible stagnancy. I think making him an annual interviewee is a great idea. :thumbsup

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by Dave55 » Thu Jan 02, 2020 2:50 pm

Great interview Rick. Thanks much.

Dave

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Re: Joe Davis, Vanguard's global chief economist, is my guest for this 2020 "Bogleheads on Investing" podcast.

Post by ALinLI » Thu Jan 02, 2020 4:30 pm

Thanks Rick. Was very interesting podcast I enjoyed it very much. Keep them coming.

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