S&P500 vs World Performance

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02nz
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Re: S&P500 vs World Performance

Post by 02nz » Mon May 18, 2020 9:52 pm

SteadyOne wrote:
Mon May 18, 2020 9:36 pm
rkhusky wrote:
Sun May 17, 2020 6:46 am
International has done poorly in recent years compared to the US. There is no guarantee that will continue. And, if you are going to check performance, 10 years is too short a time period. 40 years would be better - get you back to 1980, near the beginning of the personal computer and near the start of wide-spread stock investing (IRA started 1974/1981, 401k started 1978/1980, Roth IRA started 1997).

https://en.wikipedia.org/wiki/Individua ... nt_account
https://en.wikipedia.org/wiki/401(k)
Going even farther in time to 1900. For the US average return is 6.5% REAL return (9.6% nominal). However, the ex-US is only 4.5% real. See page 11:

https://www.credit-suisse.com/media/ass ... y-2018.pdf.

So, one can legitimately say that US stock market ALWAYS outperforms non-US on average, since it’s as far as we can reasonably go in time.
No, one cannot legitimately say that U.S. "outperforms." It outperformed over a certain time period. U.S. didn't outperform int'l today, and no one has any idea about tomorrow or the day after that.

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Que1999
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Re: S&P500 vs World Performance

Post by Que1999 » Tue May 19, 2020 3:52 am

I decided to invest domestically in the US. I decided this because it is a fact that taxes and fees are more favorable for me, being a US investor. There is no disputing the fact that as a US citizen, investing in US stocks/indexes is cheaper and offers a more favorable tax situation than a US citizen investing internationally...

It has just so happened that the US has outperformed the rest of the world, for, well... quite a while now.
:sharebeer
Last edited by Que1999 on Tue May 19, 2020 11:20 pm, edited 1 time in total.

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pennsylvania211
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Re: S&P500 vs World Performance

Post by pennsylvania211 » Tue May 19, 2020 1:07 pm

jibantik wrote:
Mon May 18, 2020 8:24 pm
pennsylvania211 wrote:
Mon May 18, 2020 10:19 am
Jack Bogle himself why he doesn't like international (he advises that if you MUST, no more than 20%):
At the end of the day, some bogleheads follow bogle when deciding not to do international. Other bogleheads follow his diversification principle when deciding to do international.

For anyone to claim superiority of one method over another, you have do demonstrate it with well reasoned argument and/or good evidence. I'd like to see an actual debate of merits but these things often turn into half-baked ego-filled spats which is a waste of everyone else's time.

If anyone has Jack explaining in detail why he breaks his own rule of diversification when going against international, that would be gold.
One is following principles, one is following the actions of a man who fell short of the wonderful principles he popularized.

It's clear to see which one is correct

I mean, if you go to church, do you strive to mimic the pastor's personal life or to follow the core principles that are espoused?
I mean, even at church, you can't really follow every detail to the letter.
- Should slaves obey their masters, for example?
- Does the Sun really go around the Earth?
Is living by pastor's example inferior to that? Should we continue with this religious tangent discussion any further?

Instead of "assuming" that Jack Bogle "fell short" of his principles, is it possible that he had good reasons to make exception to this own rule?
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

jibantik
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Re: S&P500 vs World Performance

Post by jibantik » Tue May 19, 2020 3:34 pm

pennsylvania211 wrote:
Tue May 19, 2020 1:07 pm
jibantik wrote:
Mon May 18, 2020 8:24 pm
pennsylvania211 wrote:
Mon May 18, 2020 10:19 am
Jack Bogle himself why he doesn't like international (he advises that if you MUST, no more than 20%):
At the end of the day, some bogleheads follow bogle when deciding not to do international. Other bogleheads follow his diversification principle when deciding to do international.

For anyone to claim superiority of one method over another, you have do demonstrate it with well reasoned argument and/or good evidence. I'd like to see an actual debate of merits but these things often turn into half-baked ego-filled spats which is a waste of everyone else's time.

If anyone has Jack explaining in detail why he breaks his own rule of diversification when going against international, that would be gold.
One is following principles, one is following the actions of a man who fell short of the wonderful principles he popularized.

It's clear to see which one is correct

I mean, if you go to church, do you strive to mimic the pastor's personal life or to follow the core principles that are espoused?
I mean, even at church, you can't really follow every detail to the letter.
- Should slaves obey their masters, for example?
- Does the Sun really go around the Earth?
Is living by pastor's example inferior to that? Should we continue with this religious tangent discussion any further?

Instead of "assuming" that Jack Bogle "fell short" of his principles, is it possible that he had good reasons to make exception to this own rule?
I am not assuming, he did. He led us to greatness but fell short himself. I am not saying that to insult him, I think he did incredible things, he is a personal hero of mine. But, humans are fallible, which is exactly why you strive for the core ideals and principles and not the specific actions of an individual.

By the way, I am not religious, but I assumed that would be a relatable analogy. I hope people do not go to church to worship the pastor :mrgreen:

muffins14
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Re: S&P500 vs World Performance

Post by muffins14 » Tue May 19, 2020 3:41 pm

Investing only in S&P 500 seems like a risky gamble on ~46% of the market. Why not buy the haystack?

bck63
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Re: S&P500 vs World Performance

Post by bck63 » Tue May 19, 2020 5:38 pm

The claim about "buy the whole haystack" and "own the entire market" has never made sense to me. There's not "one market" in the world. I can't put the US stock market on the same level as, say, the Chinese market. Sorry, I won't trust the Chinese stock market with my money. Who knows what's going on over there. And emerging markets with their dictators, juntas and who knows what else. You can't throw these market systems in with the US and call it "one market." I just prefer the US market. It's good enough.

muffins14
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Re: S&P500 vs World Performance

Post by muffins14 » Tue May 19, 2020 9:11 pm

Emerging markets make up 10% of the world index. You could eliminate them entirely for your "comfort" and still greatly diversify over holding just the S&P 500.

Beensabu
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Re: S&P500 vs World Performance

Post by Beensabu » Tue May 19, 2020 11:43 pm

helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
What do you think? Why? Can you be convinced to change your mind?

No? Do that.

Yes? Why? Can you be convinced to change your mind again?

No? Do that.

Yes? Uh oh.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next."

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Stef
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Re: S&P500 vs World Performance

Post by Stef » Wed May 20, 2020 12:32 am

Oh, another US vs. International thread? Don't we already have like 10 active discussions right now?

Imagine if exUS have kept outperforming 2009-2020 and thus lead in the 1900-2020 comparison. The other thread wouldn't be called "Why international?" but "Why US?". The global market is the haystack, no discussion about that. If you only invest in the US, don't hide behind what Bogle said. Don't come up with other reasons. Just admit it: you are a performance chaser.

LFKB
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Re: S&P500 vs World Performance

Post by LFKB » Wed May 20, 2020 1:04 am

minimalistmarc wrote:
Mon May 18, 2020 6:04 am
Isn’t American outperformance mostly down to FAANG?

Who knows where the next FAANG will originate?

I mean, in the next few decades we’ll probably have self driving flying cars, cures for lots of incurable diseases, amazing new green technology. I’d rather cast my net wide.

It’s an easier decision for me because I’m in the U.K. and don’t want to have any home bias
I invest in international, but all those potential areas that you mentioned are very likely to come from the US rather than other countries.

Enzo IX
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Re: S&P500 vs World Performance

Post by Enzo IX » Wed May 20, 2020 4:03 am

SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
Hard to dispute this fact. I myself am becoming impatient with international, how long does one have to wait with emerging markets to see a risk premium to show up? I like everyone else is on a limited time schedule.

Poorman
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Re: S&P500 vs World Performance

Post by Poorman » Wed May 20, 2020 5:44 am

SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
I agree. I'm 0% international stock. Funny how you get beat up for not agreeing with the international folks.

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galeno
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Re: S&P500 vs World Performance

Post by galeno » Wed May 20, 2020 6:36 am

We tilt our equities AWAY from the USA.

VTI = 100% USA

VT = 55% USA

Our equities = 50% USA

lostdog
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Re: S&P500 vs World Performance

Post by lostdog » Wed May 20, 2020 7:00 am

Poorman wrote:
Wed May 20, 2020 5:44 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
I agree. I'm 0% international stock. Funny how you get beat up for not agreeing with the international folks.
You don't get beat up. We just do our best to show the young and novice investors sitting on the sidelines reading these threads on what not to do.

We shed light on the common theme among the US only crowd is "Jack said so, so I will do what he says because he will always be right from now and into the future". Other excuses are made too. We just make it apparent that it boils down to performance chasing. There are other reasons but not as common.

It would suck if someone falls prey to these people and then international starts to outperform while they're encouraged to stay the course with US only on this forum. The investor panicks with fomo and buys into international when it's too late. We're seeing the opposite right now and it's sad to see. To make it worse they're told it was a wise decision.

I'm sure Jack would tell them to stay the course with their current International allocation. He wouldn't tell them it was a wise decision like some other members do on this forum.
Global Market Cap Equity/1 Year Cash/Bonds || 25x Expenses

SethJane42
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Re: S&P500 vs World Performance

Post by SethJane42 » Wed May 20, 2020 10:10 am

Deleted--I was wrong
Last edited by SethJane42 on Mon Jun 08, 2020 6:50 am, edited 1 time in total.

huskerfan1414
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Re: S&P500 vs World Performance

Post by huskerfan1414 » Wed May 20, 2020 10:14 am

Triple digit golfer wrote:
Sun May 17, 2020 8:58 am
I can't believe that so many Bogleheads are so vehemently against international equity investing. One of the key tenets of Bogleheads investing is diversification. Nowhere in the Bogleheads principles does it state not to invest internationally or to hold all eggs in the U.S. basket. International investing violates none of the Bogleheads principles. So if you don't do it, fine, but the nose in the air attitude about it after a decade of U.S. outperformance is nothing but recency bias. I bet not many people were so outspoken about U.S. only investing in 2007.

In fact, one of the principles is to stay the course. We've had many Bogleheads who have sold international and gone 100% U.S. That is clearly not staying the course.

Jack Bogle himself said that his recommendation is not to exceed 20%. He never said, "international investing is wrong." In fact, this is a direct quote from Bogle himself, speaking directly to Bogleheads in person:
If there's one place I don't want people to take my advice, it's international. I want you to think it through for yourself.
What do you think Bogle himself would feel is a bigger investing sin? Holding global market weight in equities for decades and staying the course throughout, or holding international for a decade of underperformance and then selling, changing one's course?

Here's another Bogle quote that should give you the answer:
Stay the Course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you.
Could your portfolio in any way be more diversified than it is right now?
The more I learn, the dumber I feel.

Triple digit golfer
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Re: S&P500 vs World Performance

Post by Triple digit golfer » Wed May 20, 2020 10:30 am

huskerfan1414 wrote:
Wed May 20, 2020 10:14 am
Triple digit golfer wrote:
Sun May 17, 2020 8:58 am
I can't believe that so many Bogleheads are so vehemently against international equity investing. One of the key tenets of Bogleheads investing is diversification. Nowhere in the Bogleheads principles does it state not to invest internationally or to hold all eggs in the U.S. basket. International investing violates none of the Bogleheads principles. So if you don't do it, fine, but the nose in the air attitude about it after a decade of U.S. outperformance is nothing but recency bias. I bet not many people were so outspoken about U.S. only investing in 2007.

In fact, one of the principles is to stay the course. We've had many Bogleheads who have sold international and gone 100% U.S. That is clearly not staying the course.

Jack Bogle himself said that his recommendation is not to exceed 20%. He never said, "international investing is wrong." In fact, this is a direct quote from Bogle himself, speaking directly to Bogleheads in person:
If there's one place I don't want people to take my advice, it's international. I want you to think it through for yourself.
What do you think Bogle himself would feel is a bigger investing sin? Holding global market weight in equities for decades and staying the course throughout, or holding international for a decade of underperformance and then selling, changing one's course?

Here's another Bogle quote that should give you the answer:
Stay the Course. No matter what happens, stick to your program. I've said "Stay the course" a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you.
Could your portfolio in any way be more diversified than it is right now?
I hold every stock in Vanguard Total Stock and Vanguard International Stock, although with a moderate U.S. tilt. I suppose I could get more diversified by holding world cap weight and also adding international bonds to my U.S.-only bond allocation.

I am assuming only stocks and bonds and not commodities, bitcoin, physical gold, cash, etc.

EddyB
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Re: S&P500 vs World Performance

Post by EddyB » Wed May 20, 2020 10:45 am

SethJane42 wrote:
Sun May 17, 2020 9:09 am
Triple digit golfer wrote:
Sun May 17, 2020 9:02 am
SethJane42 wrote:
Sun May 17, 2020 8:45 am
Triple digit golfer wrote:
Sun May 17, 2020 8:32 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner.
Good luck with that. Investing in something until it is not the winner literally means you'll sell after it underperforms.
The point is I've been in the S&P 500 for 20 years and it has been the clear winner. over the Every Stock In The World Fund (ESITWF). If the next 20 years the ESITWF outperforms the S&P 500 Index Fund by the same the S&P has beat the ESITWF, then it averages out anyway. So, best to stay with the winner.

But if you love the ESITWF and you're happy with the level of gains it has given you the past 20 years, then by all means keep with it.
Your logic is flawed. Investing isn't about being happy with past performance.
Well, my flawed logic over the last twenty years has paid very, very well. How's the ESITWF doing in comparison? Was I stupid to have not been in the ESITWF and in the S&P 500 Index instead? Take the "perfect logic" that you obviously believe that you possess, do some math, and report back with your work. How much over the next twenty years will the ESITWF have to outperform the S&P Index to come out ahead over 40 years total? 2000-2040?
You should have been in Apple.

international001
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Re: S&P500 vs World Performance

Post by international001 » Wed May 20, 2020 11:44 am

Check out this data points:

https://www.fidelity.com/viewpoints/inv ... ting-myths

"Historically, developed market international and US stock performance is cyclical"

"the absolute return of the globally balanced portfolio is almost level with that of the all-US portfolio"

jibantik
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Re: S&P500 vs World Performance

Post by jibantik » Wed May 20, 2020 12:31 pm

lostdog wrote:
Wed May 20, 2020 7:00 am
Poorman wrote:
Wed May 20, 2020 5:44 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
I agree. I'm 0% international stock. Funny how you get beat up for not agreeing with the international folks.
You don't get beat up. We just do our best to show the young and novice investors sitting on the sidelines reading these threads on what not to do.

...
+1.

Feel free to personally make all the incorrect decisions you want. But, they should NOT be normalized or given as advice to new bogleheads.

It sounds like A LOT of bogleheads need to take some time and understand the difference between outcome and strategy. Just because your incorrect decision happened to do well for you in some period of time doesn't mean that it will in the future and certainly does NOT mean it was the correct strategy.

Triple digit golfer
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Re: S&P500 vs World Performance

Post by Triple digit golfer » Wed May 20, 2020 1:25 pm

Poorman wrote:
Wed May 20, 2020 5:44 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
I agree. I'm 0% international stock. Funny how you get beat up for not agreeing with the international folks.
It's actually usually the opposite. The U.S. has outperformed for the last decade and I see a ton of "How's that working out for you?" type posts to the pro-international people. They typically cite past performance. Many have changed their course recently. Using past performance to make investment decisions and abandoning one's course due to recent performance clearly violates Boglehead principles. The pro-international people are typically just "stay the course," "nobody knows nothin,'" "buy the haystack" type people. Which sounds more Jack Bogle-approved to you?

international001
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Re: S&P500 vs World Performance

Post by international001 » Wed May 20, 2020 1:33 pm

Triple digit golfer wrote:
Wed May 20, 2020 1:25 pm
It's actually usually the opposite. The U.S. has outperformed for the last decade and I see a ton of "How's that working out for you?" type posts to the pro-international people. They typically cite past performance. Many have changed their course recently. Using past performance to make investment decisions and abandoning one's course due to recent performance clearly violates Boglehead principles. The pro-international people are typically just "stay the course," "nobody knows nothin,'" "buy the haystack" type people. Which sounds more Jack Bogle-approved to you?
What do you mean past performance doesn't matter? It's the only think we have. You just have to make sure it's long enough. 10 years is not much for stock.
Check my link for the past 70 years. If you believe it, you'll see than having international is no brainer.

dru808
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Re: S&P500 vs World Performance

Post by dru808 » Wed May 20, 2020 1:51 pm

Stef wrote:
Wed May 20, 2020 12:32 am
Oh, another US vs. International thread? Don't we already have like 10 active discussions right now?

Imagine if exUS have kept outperforming 2009-2020 and thus lead in the 1900-2020 comparison. The other thread wouldn't be called "Why international?" but "Why US?". The global market is the haystack, no discussion about that. If you only invest in the US, don't hide behind what Bogle said. Don't come up with other reasons. Just admit it: you are a performance chaser.
But, but, p/b ratios, fundamental values, p/e ratios, capitalism, communism, and and, just look at portfolio visualizer. Why would I want the lagging assets, I can just go back and find the winners and invest in those :oops:
60% US equity | 25% International equity | 15% US Treasury bonds

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Stef
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Re: S&P500 vs World Performance

Post by Stef » Wed May 20, 2020 2:10 pm

Yeah, why don't we invest only in the Nasdaq 100? I mean look at the performance! Especially the last 10 years. Or this year where it has a positive return in a bear market. Why should I invest in the inferior SP500?

Poorman
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Re: S&P500 vs World Performance

Post by Poorman » Wed May 20, 2020 3:17 pm

Triple digit golfer wrote:
Wed May 20, 2020 1:25 pm
Poorman wrote:
Wed May 20, 2020 5:44 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
Triple digit golfer wrote:
Sun May 17, 2020 7:21 am
helloyou wrote:
Sun May 17, 2020 6:03 am
I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY?
Yes it does, because diversification will remain but the outperformance may not.
I only have so much time on earth left. I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner. Diversification is good to a point. One must never lose one's critical thinking skills over a dogmatic rule.
I agree. I'm 0% international stock. Funny how you get beat up for not agreeing with the international folks.
It's actually usually the opposite. The U.S. has outperformed for the last decade and I see a ton of "How's that working out for you?" type posts to the pro-international people. They typically cite past performance. Many have changed their course recently. Using past performance to make investment decisions and abandoning one's course due to recent performance clearly violates Boglehead principles. The pro-international people are typically just "stay the course," "nobody knows nothin,'" "buy the haystack" type people. Which sounds more Jack Bogle-approved to you?
I really don't think either are right or wrong. Flip a coin. That's the winner. At the end of the day owning the S&P 500 is fairly safe and cost efficient compared to advisor
fees.

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pennsylvania211
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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 3:20 pm

jibantik wrote:
Tue May 19, 2020 3:34 pm
pennsylvania211 wrote:
Tue May 19, 2020 1:07 pm
jibantik wrote:
Mon May 18, 2020 8:24 pm
pennsylvania211 wrote:
Mon May 18, 2020 10:19 am
Jack Bogle himself why he doesn't like international (he advises that if you MUST, no more than 20%):
At the end of the day, some bogleheads follow bogle when deciding not to do international. Other bogleheads follow his diversification principle when deciding to do international.

For anyone to claim superiority of one method over another, you have do demonstrate it with well reasoned argument and/or good evidence. I'd like to see an actual debate of merits but these things often turn into half-baked ego-filled spats which is a waste of everyone else's time.

If anyone has Jack explaining in detail why he breaks his own rule of diversification when going against international, that would be gold.
One is following principles, one is following the actions of a man who fell short of the wonderful principles he popularized.

It's clear to see which one is correct

I mean, if you go to church, do you strive to mimic the pastor's personal life or to follow the core principles that are espoused?
I mean, even at church, you can't really follow every detail to the letter.
- Should slaves obey their masters, for example?
- Does the Sun really go around the Earth?
Is living by pastor's example inferior to that? Should we continue with this religious tangent discussion any further?

Instead of "assuming" that Jack Bogle "fell short" of his principles, is it possible that he had good reasons to make exception to this own rule?
I am not assuming, he did. He led us to greatness but fell short himself. I am not saying that to insult him, I think he did incredible things, he is a personal hero of mine. But, humans are fallible, which is exactly why you strive for the core ideals and principles and not the specific actions of an individual.

By the way, I am not religious, but I assumed that would be a relatable analogy. I hope people do not go to church to worship the pastor :mrgreen:
Cool. So let's hear some well thought out argument on international, besides "buy the whole stack". Convince us that your claim is true. Dogma (a principle or set of principles laid down by an authority as incontrovertibly true) isn't necessarily a good thing. How did you establish that buying the whole international stack, which comes with added risks, is superior to buying the whole domestic stack? Do you have data or sound argument that lead you to the conclusion that buying total world is superior compared to total US domestic?
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

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pennsylvania211
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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 3:34 pm

Stef wrote:
Wed May 20, 2020 2:10 pm
Yeah, why don't we invest only in the Nasdaq 100? I mean look at the performance! Especially the last 10 years. Or this year where it has a positive return in a bear market. Why should I invest in the inferior SP500?
You're committing a logical fallacy, specifically a slippery slope fallacy.

https://yourlogicalfallacyis.com/
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

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pennsylvania211
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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 3:38 pm

dru808 wrote:
Wed May 20, 2020 1:51 pm
Stef wrote:
Wed May 20, 2020 12:32 am
Oh, another US vs. International thread? Don't we already have like 10 active discussions right now?

Imagine if exUS have kept outperforming 2009-2020 and thus lead in the 1900-2020 comparison. The other thread wouldn't be called "Why international?" but "Why US?". The global market is the haystack, no discussion about that. If you only invest in the US, don't hide behind what Bogle said. Don't come up with other reasons. Just admit it: you are a performance chaser.
But, but, p/b ratios, fundamental values, p/e ratios, capitalism, communism, and and, just look at portfolio visualizer. Why would I want the lagging assets, I can just go back and find the winners and invest in those :oops:
You're committing a logical fallacy as well, specifically a strawman argument fallacy.

If you believe that in your above reply you had a full grasp of all the reasons for not doing international, then it was a strawman argument.
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 3:43 pm

Don't get mad at me for pointing out logical fallacies. Everyone makes them from time to time. We are all human. We are all constantly learning. I make my own share of fallacies. If you point mine out, without name calling, I'd be happy to correct them and appreciate your contribution.

:sharebeer
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

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Re: S&P500 vs World Performance

Post by bck63 » Wed May 20, 2020 6:10 pm

SethJane42 wrote:
Wed May 20, 2020 10:10 am
I've been told here more than once that any thinking contrary to the "one must own a fund that indexes every stock in the world" belief system is flawed thinking. Owning shares in the S&P 500 is flawed thinking. The last twenty years of amazing gains in my fund do not matter, and to continue on with the fund would be flawed thinking. Buying 1000 shares of AAPL when it was 12.31 a share based on my learning and research was flawed thinking and an act of causing "overweightness" in my portfolio. Who do I think I am to believe I could pick a stock on my own?

I would never call the dogmatic belief system that one should only own shares in a fund that indexes every stock in the world flawed thinking, or a bond fund that does the same. It will produce a certain range of returns over one's lifetime, under a certain level of risk. One can just get into such a fund and never think about investing again, except for making contributions. And this is great for a certain kind of personality or for a person with a certain level of knowledge about investing. I would never tell a person not to go with that strategy.

When I first got in 20 years ago, Mr. Bogle at Vanguard recommended the S&P 500 Index fund, as did my wise uncle, and the Grand Pooba of Omaha. Time has proven to me that they weren't flawed in their thinking. I don't do international. It doesn't interest me. It has never looked as good to me. Glad I didn't. I'm perfectly happy with my portfolio balance (which includes some stocks) and know it has beat the returns of anyone here that has just been in an all-world fund the last 20 years. That doesn't mean an all-world person should think his or her thinking was flawed. It was just a choice to go with a strategy that produces the returns that you have seen.
Thank you for this. Very well said.

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Re: S&P500 vs World Performance

Post by Ruttiger » Wed May 20, 2020 6:59 pm

My naivity and laziness about international keeps me 100% US. Don't know, and not motivated enough (yet) to understand market assumptions, laws, corruption, government regulations, etc. In the 170+ other countries in the world, some of which are dictatorships or communist (grew up in the 80's so tough for me to invest in communist countries - i don't understand the growth model). At most 2-3 countries are world powers,, not sure the influence of all thd others.. When the US starts trending more socialist i might take notice and make a better effort. I don't think each country plays by the same rules and performance is tilted towards the US. I dont think we are dealing with a "fair coin".

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Re: S&P500 vs World Performance

Post by Ruttiger » Wed May 20, 2020 7:07 pm

I trust the US for wealth creation

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Re: S&P500 vs World Performance

Post by jibantik » Wed May 20, 2020 7:07 pm

pennsylvania211 wrote:
Wed May 20, 2020 3:20 pm
jibantik wrote:
Tue May 19, 2020 3:34 pm
pennsylvania211 wrote:
Tue May 19, 2020 1:07 pm
jibantik wrote:
Mon May 18, 2020 8:24 pm
pennsylvania211 wrote:
Mon May 18, 2020 10:19 am
Jack Bogle himself why he doesn't like international (he advises that if you MUST, no more than 20%):





At the end of the day, some bogleheads follow bogle when deciding not to do international. Other bogleheads follow his diversification principle when deciding to do international.

For anyone to claim superiority of one method over another, you have do demonstrate it with well reasoned argument and/or good evidence. I'd like to see an actual debate of merits but these things often turn into half-baked ego-filled spats which is a waste of everyone else's time.

If anyone has Jack explaining in detail why he breaks his own rule of diversification when going against international, that would be gold.
One is following principles, one is following the actions of a man who fell short of the wonderful principles he popularized.

It's clear to see which one is correct

I mean, if you go to church, do you strive to mimic the pastor's personal life or to follow the core principles that are espoused?
I mean, even at church, you can't really follow every detail to the letter.
- Should slaves obey their masters, for example?
- Does the Sun really go around the Earth?
Is living by pastor's example inferior to that? Should we continue with this religious tangent discussion any further?

Instead of "assuming" that Jack Bogle "fell short" of his principles, is it possible that he had good reasons to make exception to this own rule?
I am not assuming, he did. He led us to greatness but fell short himself. I am not saying that to insult him, I think he did incredible things, he is a personal hero of mine. But, humans are fallible, which is exactly why you strive for the core ideals and principles and not the specific actions of an individual.

By the way, I am not religious, but I assumed that would be a relatable analogy. I hope people do not go to church to worship the pastor :mrgreen:
Cool. So let's hear some well thought out argument on international, besides "buy the whole stack". Convince us that your claim is true. Dogma (a principle or set of principles laid down by an authority as incontrovertibly true) isn't necessarily a good thing. How did you establish that buying the whole international stack, which comes with added risks, is superior to buying the whole domestic stack? Do you have data or sound argument that lead you to the conclusion that buying total world is superior compared to total US domestic?
Well, I am not really claiming anything, that is exactly the point. We have the universe of equities, THE market. I have no idea which stocks are going to outperform others. I am not claiming international or will outperform US or any other arbitrary subset of the market. How could I know how thousands of global companies are going to perform decades into the future.

Once I obtain the magic 8-ball that you and some special "bogleheads" possess, I too will subselect the market and pick future winners. Until then, what else can I do except to take THE market as it is.

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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 7:17 pm

jibantik wrote:
Wed May 20, 2020 7:07 pm
Well, I am not really claiming anything...
jibantik wrote: It's clear to see which one is correct
Sure bud... :sharebeer

I'd like to see how it's so clear which one is correct.
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

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Re: S&P500 vs World Performance

Post by columbia » Wed May 20, 2020 7:54 pm

jibantik wrote:
Wed May 20, 2020 7:07 pm
pennsylvania211 wrote:
Wed May 20, 2020 3:20 pm
jibantik wrote:
Tue May 19, 2020 3:34 pm
pennsylvania211 wrote:
Tue May 19, 2020 1:07 pm
jibantik wrote:
Mon May 18, 2020 8:24 pm


One is following principles, one is following the actions of a man who fell short of the wonderful principles he popularized.

It's clear to see which one is correct

I mean, if you go to church, do you strive to mimic the pastor's personal life or to follow the core principles that are espoused?
I mean, even at church, you can't really follow every detail to the letter.
- Should slaves obey their masters, for example?
- Does the Sun really go around the Earth?
Is living by pastor's example inferior to that? Should we continue with this religious tangent discussion any further?

Instead of "assuming" that Jack Bogle "fell short" of his principles, is it possible that he had good reasons to make exception to this own rule?
I am not assuming, he did. He led us to greatness but fell short himself. I am not saying that to insult him, I think he did incredible things, he is a personal hero of mine. But, humans are fallible, which is exactly why you strive for the core ideals and principles and not the specific actions of an individual.

By the way, I am not religious, but I assumed that would be a relatable analogy. I hope people do not go to church to worship the pastor :mrgreen:
Cool. So let's hear some well thought out argument on international, besides "buy the whole stack". Convince us that your claim is true. Dogma (a principle or set of principles laid down by an authority as incontrovertibly true) isn't necessarily a good thing. How did you establish that buying the whole international stack, which comes with added risks, is superior to buying the whole domestic stack? Do you have data or sound argument that lead you to the conclusion that buying total world is superior compared to total US domestic?
Well, I am not really claiming anything, that is exactly the point. We have the universe of equities, THE market. I have no idea which stocks are going to outperform others. I am not claiming international or will outperform US or any other arbitrary subset of the market. How could I know how thousands of global companies are going to perform decades into the future.

Once I obtain the magic 8-ball that you and some special "bogleheads" possess, I too will subselect the market and pick future winners. Until then, what else can I do except to take THE market as it is.
More accurately: a large collection of markets; there is not a single, global market. YMMV on how each one treats investors.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: S&P500 vs World Performance

Post by jibantik » Wed May 20, 2020 8:01 pm

pennsylvania211 wrote:
Wed May 20, 2020 7:17 pm
jibantik wrote:
Wed May 20, 2020 7:07 pm
Well, I am not really claiming anything...
jibantik wrote: It's clear to see which one is correct
Sure bud... :sharebeer

I'd like to see how it's so clear which one is correct.
Burden of proof is on you not me.

You are saying there is a teapot orbiting the sun and are asking me to prove you wrong because I don't believe you? Cmon now.

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Re: S&P500 vs World Performance

Post by pennsylvania211 » Wed May 20, 2020 8:12 pm

jibantik wrote:
Wed May 20, 2020 8:01 pm
pennsylvania211 wrote:
Wed May 20, 2020 7:17 pm
jibantik wrote:
Wed May 20, 2020 7:07 pm
Well, I am not really claiming anything...
jibantik wrote: It's clear to see which one is correct
Sure bud... :sharebeer

I'd like to see how it's so clear which one is correct.
Burden of proof is on you not me.

You are saying there is a teapot orbiting the sun and are asking me to prove you wrong because I don't believe you? Cmon now.
What claim did I make?
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

Beensabu
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Re: S&P500 vs World Performance

Post by Beensabu » Wed May 20, 2020 10:09 pm

pennsylvania211 wrote:
Wed May 20, 2020 3:20 pm
Cool. So let's hear some well thought out argument on international, besides "buy the whole stack". Convince us that your claim is true. Dogma (a principle or set of principles laid down by an authority as incontrovertibly true) isn't necessarily a good thing. How did you establish that buying the whole international stack, which comes with added risks, is superior to buying the whole domestic stack? Do you have data or sound argument that lead you to the conclusion that buying total world is superior compared to total US domestic?
Someone else has already posted this link to the Wiki upthread:

https://www.bogleheads.org/wiki/Domestic/International

Please note that the data presented in the Wiki is from 1970-2008. The efficient frontier for the last 50 years is of course different than what is presented in the Wiki when taking into account the past 12 years of data that is not included there at this time. If you include the last 12 years in Figure 5, the red line is going to be higher than the blue line which will be higher than the green line for the last 8 of those most recent years. Similar to how from about 1984-1996 the green line was higher than the blue line which was higher than the red line. Notice how the blue line (the world market) stays in the middle regardless of whether the red line or the green line is winning.

Please also note that the past 12 years do not change the following:
Within the market portfolio, asset specific risk will be diversified away to the extent possible.
One consequence of this is that the market portfolio is a starting point for most portfolios, and specific risk toward tilting to a home country should be taken with care and the choice to tilt made for conscious reasons.
Despite the potential drawbacks of a perceived higher risk, the impact of currency fluctuations, higher investment costs, and an aversion to short-term underperformance relative to domestic markets, international stock investments provide a diversification benefit relative to an all-U.S. equity allocation.
...it is obvious that the optimal U.S./International allocation differs depending on the period. However, one thing is clear; combining both U.S. and International stocks has historically increased your return, decreased your volatility of returns, or both.
The MSCI World index is comprised of all developed market countries. Their percentage in the index is weighted by their global market-capitalization, and so fluctuates in size as each country increases or decreases its world market presence.
Both because markets tend to move in different cycles and because you want to diversify your currency exposure, the need for both U.S. and international allocations is a common recommendation.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next."

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Re: S&P500 vs World Performance

Post by jibantik » Wed May 20, 2020 11:28 pm

pennsylvania211 wrote:
Wed May 20, 2020 8:12 pm
jibantik wrote:
Wed May 20, 2020 8:01 pm
pennsylvania211 wrote:
Wed May 20, 2020 7:17 pm
jibantik wrote:
Wed May 20, 2020 7:07 pm
Well, I am not really claiming anything...
jibantik wrote: It's clear to see which one is correct
Sure bud... :sharebeer

I'd like to see how it's so clear which one is correct.
Burden of proof is on you not me.

You are saying there is a teapot orbiting the sun and are asking me to prove you wrong because I don't believe you? Cmon now.
What claim did I make?
We all started at the universe of equities, THE market. Somehow you decided to subselect within that. You deviated from the null position. Either you did that as an arbitrary decision (bad) or did because you believe whatever sub-selection you chose is better than the market (also bad). Whatever decision led you to choose whatever sub-selection you have would be your "claim". Frankly, it doesn't really matter to me, it's wrong. You don't know better than the market, you are not a special stock picking savant.

If you can somehow prove me you can predict how thousands of companies will perform decades into the future, I am all ears. But, it's going to take more than "US outperformed international between years XXXX and YYYY".

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Re: S&P500 vs World Performance

Post by pennsylvania211 » Thu May 21, 2020 6:13 am

Beensabu wrote:
Wed May 20, 2020 10:09 pm
pennsylvania211 wrote:
Wed May 20, 2020 3:20 pm
Cool. So let's hear some well thought out argument on international, besides "buy the whole stack". Convince us that your claim is true. Dogma (a principle or set of principles laid down by an authority as incontrovertibly true) isn't necessarily a good thing. How did you establish that buying the whole international stack, which comes with added risks, is superior to buying the whole domestic stack? Do you have data or sound argument that lead you to the conclusion that buying total world is superior compared to total US domestic?
Someone else has already posted this link to the Wiki upthread:

https://www.bogleheads.org/wiki/Domestic/International

Please note that the data presented in the Wiki is from 1970-2008. The efficient frontier for the last 50 years is of course different than what is presented in the Wiki when taking into account the past 12 years of data that is not included there at this time. If you include the last 12 years in Figure 5, the red line is going to be higher than the blue line which will be higher than the green line for the last 8 of those most recent years. Similar to how from about 1984-1996 the green line was higher than the blue line which was higher than the red line. Notice how the blue line (the world market) stays in the middle regardless of whether the red line or the green line is winning.

Please also note that the past 12 years do not change the following:
Within the market portfolio, asset specific risk will be diversified away to the extent possible.
One consequence of this is that the market portfolio is a starting point for most portfolios, and specific risk toward tilting to a home country should be taken with care and the choice to tilt made for conscious reasons.
Despite the potential drawbacks of a perceived higher risk, the impact of currency fluctuations, higher investment costs, and an aversion to short-term underperformance relative to domestic markets, international stock investments provide a diversification benefit relative to an all-U.S. equity allocation.
...it is obvious that the optimal U.S./International allocation differs depending on the period. However, one thing is clear; combining both U.S. and International stocks has historically increased your return, decreased your volatility of returns, or both.
The MSCI World index is comprised of all developed market countries. Their percentage in the index is weighted by their global market-capitalization, and so fluctuates in size as each country increases or decreases its world market presence.
Both because markets tend to move in different cycles and because you want to diversify your currency exposure, the need for both U.S. and international allocations is a common recommendation.
Thanks Beensabu. This is what I was looking for. I'll look into it in detail.

Cheers!
:sharebeer
"In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses." - Jack Bogle

KSActuary
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Re: S&P500 vs World Performance

Post by KSActuary » Thu May 21, 2020 9:05 am

SethJane42 wrote:
Sun May 17, 2020 9:09 am
Triple digit golfer wrote:
Sun May 17, 2020 9:02 am
SethJane42 wrote:
Sun May 17, 2020 8:45 am
Triple digit golfer wrote:
Sun May 17, 2020 8:32 am
SethJane42 wrote:
Sun May 17, 2020 8:17 am
I'll stick with the overwhelming winner, the S&P 500 Index fund, until it's not the winner.
Good luck with that. Investing in something until it is not the winner literally means you'll sell after it underperforms.
The point is I've been in the S&P 500 for 20 years and it has been the clear winner. over the Every Stock In The World Fund (ESITWF). If the next 20 years the ESITWF outperforms the S&P 500 Index Fund by the same the S&P has beat the ESITWF, then it averages out anyway. So, best to stay with the winner.

But if you love the ESITWF and you're happy with the level of gains it has given you the past 20 years, then by all means keep with it.
Your logic is flawed. Investing isn't about being happy with past performance.
Well, my flawed logic over the last twenty years has paid very, very well. How's the ESITWF doing in comparison? Was I stupid to have not been in the ESITWF and in the S&P 500 Index instead? Take the "perfect logic" that you obviously believe that you possess, do some math, and report back with your work. How much over the next twenty years will the ESITWF have to outperform the S&P Index to come out ahead over 40 years total? 2000-2040?
Hey, its all about tomorrow. If I didn't know what forum I was on, I would think I was listening to a bunch of financial advisors trying to explain away poor performance. Anyone can invest any which way they want. We have been very overweight the US since the GFC and will only begin to reduce that overweight should economic conditions change overseas. With the changes necessary to move logistics and manufacturing away from China and China's commitment to overtake the US in technology, there may be some interesting changes taking place overseas. I'm very happy today with my past performance.

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Re: S&P500 vs World Performance

Post by KSActuary » Thu May 21, 2020 9:08 am

Stef wrote:
Wed May 20, 2020 2:10 pm
Yeah, why don't we invest only in the Nasdaq 100? I mean look at the performance! Especially the last 10 years. Or this year where it has a positive return in a bear market. Why should I invest in the inferior SP500?
Invest in both, we did. The difference between a global approach to investing versus some form of selection is whether or not you are an active or passive investor. Merely by selecting the US over non-US assets, you have interjected an active component.

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Re: S&P500 vs World Performance

Post by Rosencrantz1 » Thu May 21, 2020 7:46 pm

jibantik wrote:
Wed May 20, 2020 7:07 pm
Until then, what else can I do except to take THE market as it is.
A couple of questions -

Do you agree that US has outperformed, in aggregate, exUS for the past century+ ? If yes, can you offer any ideas as to why? And, yes, I recognize exUS has had some periods of outperformance over the past 100 years.

Which leads to my follow-on questions. When one "takes THE market as it is", does one consider, on a global scale, geography? demographics? national university systems? rule of law? capitalism? propensity for fraud? corporate tax structure? SEC? despots? monarchy? authoritarianism? etc. etc.

The world is a big place and I don't pretend to understand the inner workings of the CCP (the stock dilution issue there is a biggie) or, for that matter, Vietnam.

My point is this - - there are an awful lot of things to think about when "taking THE market as it is". Investing in the US 'haystack' dramatically reduces the bandwidth - it's been much simpler for me. And, of course, I've reaped the benefits of, overall, looooooooong time periods of performance. I'm not only looking at the past year or 5 years or 10 years. I'm looking at the past 50 - 100 years too.

anyway... just my 0.02cents.

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Re: S&P500 vs World Performance

Post by boglerdude » Thu May 21, 2020 10:57 pm

> US has outperformed, in aggregate, exUS for the past century+

So ex-US is still too expensive? Why isnt all that historical/political data priced in?

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Re: S&P500 vs World Performance

Post by jibantik » Fri May 22, 2020 9:30 am

Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Do you agree that US has outperformed, in aggregate, exUS for the past century+ ? If yes, can you offer any ideas as to why? And, yes, I recognize exUS has had some periods of outperformance over the past 100 years.
Sure, if that is what the data shows. Not particularly detailed reasons, but I know the US has done well in certain areas over the last century. That does not mean I think the US will outperform going forward. That also does not mean I think the US will not outperform going forward. I do not know.

If you are overweight a subset of the market, you are effectively claiming that you can take a chart like this:

Image

And at any point in time, predict what the future of that chart will look like. I cannot make a claim like that, so what else can I do except invest at market weight.
Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Which leads to my follow-on questions. When one "takes THE market as it is", does one consider, on a global scale, geography? demographics? national university systems? rule of law? capitalism? propensity for fraud? corporate tax structure? SEC? despots? monarchy? authoritarianism? etc. etc.
Kind of. You could say I take none of that or all of that into account. I recognize that no one could possibly take these into account into pricing the market better than what the market has priced itself. It is the aggregate of what everyone believes it should be priced at. I certainly don't have some magic formula that says given these variables the correct pricing is X. I invest in the total market exactly because I do not have that magic formula.

Here is a question for you, given that you admittedly do not feel confident pricing the international market, then why do you? By over-weighting US, you ARE pricing the international markets and deciding the market price is not right. How can you make the judgement when you do not understand them?
Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Investing in the US 'haystack' dramatically reduces the bandwidth - it's been much simpler for me.
I don't know why people say this. All you have to is select VTWAX instead of VTSAX. That's it. It's incredibly simple.

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Re: S&P500 vs World Performance

Post by bogledogle87 » Fri May 22, 2020 9:44 am

jibantik wrote:
Fri May 22, 2020 9:30 am
If you are overweight a subset of the market, you are effectively claiming that you can take a chart like this:

Image

And at any point in time, predict what the future of that chart will look like. I cannot make a claim like that, so what else can I do except invest at market weight.
Great stuff, I've seen this chart before from another source, but this one is much more detailed. Can you share a link to the source? I would love to see more data like this.
VTWAX and chill

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Re: S&P500 vs World Performance

Post by Rosencrantz1 » Fri May 22, 2020 9:59 am

jibantik wrote:
Fri May 22, 2020 9:30 am
Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Do you agree that US has outperformed, in aggregate, exUS for the past century+ ? If yes, can you offer any ideas as to why? And, yes, I recognize exUS has had some periods of outperformance over the past 100 years.
Sure, if that is what the data shows. Not particularly detailed reasons, but I know the US has done well in certain areas over the last century. That does not mean I think the US will outperform going forward. That also does not mean I think the US will not outperform going forward. I do not know.
Yes, it has done well over the last century - to the tune of about 2% CAGR per annum. In my view, for something to happen for such a loooong time, there MUST be some reason.
If you are overweight a subset of the market, you are effectively claiming that you can take a chart like this:

Image

And at any point in time, predict what the future of that chart will look like. I cannot make a claim like that, so what else can I do except invest at market weight.
Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Which leads to my follow-on questions. When one "takes THE market as it is", does one consider, on a global scale, geography? demographics? national university systems? rule of law? capitalism? propensity for fraud? corporate tax structure? SEC? despots? monarchy? authoritarianism? etc. etc.
Kind of. You could say I take none of that or all of that into account. I recognize that no one could possibly take these into account into pricing the market better than what the market has priced itself. It is the aggregate of what everyone believes it should be priced at. I certainly don't have some magic formula that says given these variables the correct pricing is X. I invest in the total market exactly because I do not have that magic formula.
Okay. I believe Mr. Market 'discounts' international for (at least) some of the reasons I've listed - and will continue to discount international because of some of those same reasons.
Here is a question for you, given that you admittedly do not feel confident pricing the international market, then why do you? By over-weighting US, you ARE pricing the international markets and deciding the market price is not right. How can you make the judgement when you do not understand them?
I think I do understand some of the reasons international is discounted - and will likely continue to be discounted. Of course there are lots and lots of reasons I don't understand - like how will the CCP manipulate their market in the future? How will Russia continue to manipulate their energy supplies? Will Iran provoke yet another skirmish in the gulf? I don't want to risk my investment dollars on these kinds of unknowns.
Rosencrantz1 wrote:
Thu May 21, 2020 7:46 pm
Investing in the US 'haystack' dramatically reduces the bandwidth - it's been much simpler for me.
I don't know why people say this. All you have to is select VTWAX instead of VTSAX. That's it. It's incredibly simple. See above...
Edit to add: I'm not quite sure how to clip sections of quotes and reply - obviously...
Last edited by Rosencrantz1 on Fri May 22, 2020 10:01 am, edited 1 time in total.

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Re: S&P500 vs World Performance

Post by UpsetRaptor » Fri May 22, 2020 10:00 am

boglerdude wrote:
Thu May 21, 2020 10:57 pm
> US has outperformed, in aggregate, exUS for the past century+

So ex-US is still too expensive? Why isnt all that historical/political data priced in?
Was it fully, 100% completely priced in in 2000? 1900? 1800?

Is there some number of years decades centuries of US outperformance where an individual who subscribes to the theory that ex-US equities are a truly 100% risk-free diversification free lunch would be reasonable to take a step back and say "Hmmm, maybe there's something not completely 100% correct about this theory?"

Rosencrantz1
Posts: 561
Joined: Tue Sep 10, 2019 12:28 pm

Re: S&P500 vs World Performance

Post by Rosencrantz1 » Fri May 22, 2020 12:03 pm

UpsetRaptor wrote:
Fri May 22, 2020 10:00 am
boglerdude wrote:
Thu May 21, 2020 10:57 pm
> US has outperformed, in aggregate, exUS for the past century+

So ex-US is still too expensive? Why isnt all that historical/political data priced in?
Was it fully, 100% completely priced in in 2000? 1900? 1800?

Is there some number of years decades centuries of US outperformance where an individual who subscribes to the theory that ex-US equities are a truly 100% risk-free diversification free lunch would be reasonable to take a step back and say "Hmmm, maybe there's something not completely 100% correct about this theory?"
That's a great question - and, speaks to the very long outperformance of US.

jibantik
Posts: 397
Joined: Fri Nov 24, 2017 1:05 pm

Re: S&P500 vs World Performance

Post by jibantik » Fri May 22, 2020 12:37 pm

bogledogle87 wrote:
Fri May 22, 2020 9:44 am
jibantik wrote:
Fri May 22, 2020 9:30 am
If you are overweight a subset of the market, you are effectively claiming that you can take a chart like this:

Image

And at any point in time, predict what the future of that chart will look like. I cannot make a claim like that, so what else can I do except invest at market weight.
Great stuff, I've seen this chart before from another source, but this one is much more detailed. Can you share a link to the source? I would love to see more data like this.
I was actually looking for the one that is posted here, but I couldn't find it. Anyway, I got this image from here: https://globalfinancialdata.com/wars-and-financial-panics-global-bear-markets-in-the-twentieth-century/

FYI no idea about the article, just snagged the image.

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