VT as single fund, now post covid recession

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dandydoc
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VT as single fund, now post covid recession

Post by dandydoc »

Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
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Chrono Triggered
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Re: VT as single fund, now post covid recession

Post by Chrono Triggered »

VT (Total World Stock Market) was a great choice before covid came into existence and it still is.
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nisiprius
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Re: VT as single fund, now post covid recession

Post by nisiprius »

On June 8th, 2020, the National Bureau of Economic Research--the usually-cited authority for recession dates--announced announced
The committee has determined that a peak in monthly economic activity occurred in the U.S. economy in February 2020. The peak marks the end of the expansion that began in June 2009 and the beginning of a recession.
However, it has not announced the end of the recession.

You are making a prediction about recessions: you are predicting that the recession that began in February is, in fact, over. Predictions are unreliable. I would not take any investment actions on the basis of recession predictions.

You say the markets "are booming," but that's a point in time. Yes, they are. You have no particular reason to predict they will continue to boom. The real economy isn't booming yet; the stock market isn't the real economy, but it isn't completely detached, either.

100% stocks is what it is. If you have always been happy with that level of risk, you should still be happy with it. If you weren't happy with it before, you shouldn't be happy now. The stock market crashed in 1937, immediately after it seemed to have recovered. The fact that the stock market has recovered from a crash does not make it any safer than before.
Last edited by nisiprius on Tue Sep 15, 2020 7:27 am, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
arf30
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Re: VT as single fund, now post covid recession

Post by arf30 »

dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession
Huh?
whereskyle
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Re: VT as single fund, now post covid recession

Post by whereskyle »

dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
I've been extremely happy with VT pre and during the pandemic. Bogledogle87 has a great post about how VT offers a US investor the best of all worst case scenarios due to its fluid allocations. If US outperforms indefinitely, great, VT will give you more and more of that exposure. If ex-US outperforms indefinitely, great, VT will give you more and more of that exposure. VT comes with built-in downside protection that a fixed us/ex-us allocation cannot give you.

50% of my portfolio is VT.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
lostdog
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Re: VT as single fund, now post covid recession

Post by lostdog »

whereskyle wrote: Tue Sep 15, 2020 7:06 am
dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
I've been extremely happy with VT pre and during the pandemic. Bogledogle87 has a great post about how VT offers a US investor the best of all worst case scenarios due to its fluid allocations. If US outperforms indefinitely, great, VT will give you more and more of that exposure. If ex-US outperforms indefinitely, great, VT will give you more and more of that exposure. VT comes with built-in downside protection that a fixed us/ex-us allocation cannot give you.

50% of my portfolio is VT.
Is the other 50% VTSAX because of capital gains?
whereskyle
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Re: VT as single fund, now post covid recession

Post by whereskyle »

lostdog wrote: Tue Sep 15, 2020 7:08 am
whereskyle wrote: Tue Sep 15, 2020 7:06 am
dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
I've been extremely happy with VT pre and during the pandemic. Bogledogle87 has a great post about how VT offers a US investor the best of all worst case scenarios due to its fluid allocations. If US outperforms indefinitely, great, VT will give you more and more of that exposure. If ex-US outperforms indefinitely, great, VT will give you more and more of that exposure. VT comes with built-in downside protection that a fixed us/ex-us allocation cannot give you.

50% of my portfolio is VT.
Is the other 50% VTSAX because of capital gains?
Oddly enough the other 50% is VTSAX, but not because of capital gains. Starting out, I subscribed to Jack's American exceptionalism and was 100% VTSAX. After discussing with you and others in the global market cap crowd here, I decided that both views were persuasive, but I still did not want a pure ex-US fund, as I worried about the behavioral risks associated with maintaining a fixed ex-us allocation. Ultimately, I've adopted a schizophrenic approach. I am 1/2 global and I'm 1/2 US-only. I plan to maintain a 50/50 split regardless of how VT's composition changes.

We'll see if I fold and go all in on global market cap eventually.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
lostdog
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Re: VT as single fund, now post covid recession

Post by lostdog »

whereskyle wrote: Tue Sep 15, 2020 7:23 am
lostdog wrote: Tue Sep 15, 2020 7:08 am
whereskyle wrote: Tue Sep 15, 2020 7:06 am
dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
I've been extremely happy with VT pre and during the pandemic. Bogledogle87 has a great post about how VT offers a US investor the best of all worst case scenarios due to its fluid allocations. If US outperforms indefinitely, great, VT will give you more and more of that exposure. If ex-US outperforms indefinitely, great, VT will give you more and more of that exposure. VT comes with built-in downside protection that a fixed us/ex-us allocation cannot give you.

50% of my portfolio is VT.
Is the other 50% VTSAX because of capital gains?
Oddly enough the other 50% is VTSAX, but not because of capital gains. Starting out, I subscribed to Jack's American exceptionalism and was 100% VTSAX. After discussing with you and others in the global market cap crowd here, I decided that both views were persuasive, but I still did not want a pure ex-US fund, as I worried about the behavioral risks associated with maintaining a fixed ex-us allocation. Ultimately, I've adopted a schizophrenic approach. I am 1/2 global and I'm 1/2 US-only. I plan to maintain a 50/50 split regardless of how VT's composition changes.

We'll see if I fold and go all in on global market cap eventually.
:sharebeer

I did have VTWAX in the taxable account. I took the opportunity to TLH to VTSAX+VTIAX back in March. VTWAX is in the IRA. VTSAX +VTIAX will float like VTWAX. When I add to the taxable account I allocate to whatever the current world market cap is.

I wish I could just have VT in all accounts. So simple and elegant.

https://youtu.be/_chiIIxMGl0

https://youtu.be/LwTHLtuToSY
Wanderingwheelz
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Re: VT as single fund, now post covid recession

Post by Wanderingwheelz »

There was a good comment raised in another thread regarding VT and how the foreign tax credit is recognized. It made me unlikely to use VT in a taxable account, although I use VT exclusively for my stock allocation in my tax-deferred accounts.

I have $115,000 of VT in my taxable account that I’m going to let go of as soon as an opportunity arises.
lostdog
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Re: VT as single fund, now post covid recession

Post by lostdog »

Wanderingwheelz wrote: Tue Sep 15, 2020 7:44 am There was a good comment raised in another thread regarding VT and how the foreign tax credit is recognized. It made me unlikely to use VT in a taxable account, although I use VT exclusively for my stock allocation in my tax-deferred accounts.

I have $115,000 of VT in my taxable account that I’m going to let go of as soon as an opportunity arises.
+1

OP, for the foreign tax credit issue, you would be better off going with VTI+VXUS in taxable and VT in your tax-defferred.
tibbitts
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Re: VT as single fund, now post covid recession

Post by tibbitts »

dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
As far as I know there is no indication that we are past Covid-19, and the related recession could last for many years or even decades. Many of us are now more aware of hazards similar to Covid-19, and I don't know of any reason why they can't recur on an annual or even more frequent basis, indefinitely.

Having said that I don't think there's anything wrong with investing in VT at any time, although it would have been nice if you had said it was Vanguard's Total World fund. Please edit your subject before you die from Covid-20.
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galeno
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Re: VT as single fund, now post covid recession

Post by galeno »

For those of us who think KISS is bliss.

The ONLY equity ETF choice for globalist US investors: VT.

The ONLY equity UCITS choice for non-US investors: VWRx.

x = prefered currency. Accumulating or non-accumulating UCITS ETFs.
KISS & STC.
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arcticpineapplecorp.
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Re: VT as single fund, now post covid recession

Post by arcticpineapplecorp. »

dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
markets "may have boomed" but that does not mean "they are booming".

you only know what has happened, not what's going to happen. you're extrapolating from the recent past into the indefinite (or short term?) future.

the one thing we know is that we don't know what we don't know (another way of saying no one knows the future).

we could have a pick up in covid cases in the fall/winter and markets could fall again (or fall due to some other as yet unknown reason which has generally been the case when markets have fallen over the past few hundred years).

so VT is either a fine decision all the time (which I happen to think it is) or none of the time.

otherwise, you're asking when is VT a good time to invest in it? As if you should switch in and out of it due to short term events.

do you have a long term plan?

If yes, why let short term events disrupt your long term plans?

if not, start here:
https://www.bogleheads.org/wiki/Investm ... _statement

read my signature below (and follow it). it answers your question quite nicely.
Last edited by arcticpineapplecorp. on Tue Sep 15, 2020 8:55 am, edited 2 times in total.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Valuethinker
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Re: VT as single fund, now post covid recession

Post by Valuethinker »

tibbitts wrote: Tue Sep 15, 2020 8:08 am
dandydoc wrote: Tue Sep 15, 2020 6:40 am Now that we are post covid recession and markets booming again, any new thoughts about VT as single stock fund?
Any new thoughts about US/Int'l allocation in VT going forward?
Thanks.
As far as I know there is no indication that we are past Covid-19, and the related recession could last for many years or even decades. Many of us are now more aware of hazards similar to Covid-19, and I don't know of any reason why they can't recur on an annual or even more frequent basis, indefinitely.

Having said that I don't think there's anything wrong with investing in VT at any time, although it would have been nice if you had said it was Vanguard's Total World fund. Please edit your subject before you die from Covid-20.
And I thought that *I* was the pessimist ;-).

If Covid-19 is a long term problem then the economy will reshape itself. Less emphasis on group experiences indoors, for example. ESPN say might be more valuable as games move to venues with empty seating. Expensive home audio equipment so we can enjoy a rock concert from our own living room in real surround sound. Less air travel? There will be more motoring holidays. Deep clean/ sterilization companies will do well.

I note the Far Eastern countries are generally far ahead of the curve on Covid-19 control v the western ones. Thus things that sell into those economics should do relatively well - mining, luxury goods etc.
heyyou
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Re: VT as single fund, now post covid recession

Post by heyyou »

Donald Rumsfield said "We don't know, what we don't know."
Uncertainty is constant, it is just opinions or perceptions about now being a time of post-this or post-that. Invest regardless, then just accept the inevitable consequences with their value fluctuations. Those are exactly the risks for which investors are rewarded, and there isn't some clock that that marks when the future is or is not, safer than before. Yes, there is the perception of more safety at times, but 9-11 showed how that can change in a few hours.

I knew the person, who as a child was perhaps the last polio victim in a small town, far from the more populated state capital (perhaps slower to receive the vaccine), in the 1950s. That last victim scenario will be repeated again, in many places, in the near future. Try to not become one of those by abandoning safety too soon, but go ahead and invest in stock funds now, for rewards in the distant future.

It has been a very rewarding but bumpy road since my new 401k offered index funds in 1980, but I could afford to retire 25 years later, and did. Invest now and you will be glad of it much later, while regretting it several times in between. Somewhere there is likely a chart that shows the successful performance of the investor who bought at all of the wrong times.
lostdog
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Re: VT as single fund, now post covid recession

Post by lostdog »

heyyou wrote: Tue Sep 15, 2020 9:10 am Donald Rumsfield said "We don't know, what we don't know."
Uncertainty is constant, it is just opinions or perceptions about now being a time of post-this or post-that. Invest regardless, then just accept the inevitable consequences with their value fluctuations. Those are exactly the risks for which investors are rewarded, and there isn't some clock that that marks when the future is or is not, safer than before. Yes, there is the perception of more safety at times, but 9-11 showed how that can change in a few hours.

I knew the person, who as a child was perhaps the last polio victim in a small town, far from the more populated state capital (perhaps slower to receive the vaccine), in the 1950s. That last victim scenario will be repeated again, in many places, in the near future. Try to not become one of those by abandoning safety too soon, but go ahead and invest in stock funds now, for rewards in the distant future.

It has been a very rewarding but bumpy road since my new 401k offered index funds in 1980, but I could afford to retire 25 years later, and did. Invest now and you will be glad of it much later, while regretting it several times in between. Somewhere there is likely a chart that shows the successful performance of the investor who bought at all of the wrong times.
+1

In bold. This is a huge realization. It can take awhile to realize this for some investors.
Massdriver
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Re: VT as single fund, now post covid recession

Post by Massdriver »

VT is my favorite ETF that I don't own. I recommend it regularly as a single fund solution to a 100% equity allocation.
Tamalak
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Re: VT as single fund, now post covid recession

Post by Tamalak »

I own VXUS and VTI in proportion to world capitalization because of the lower total Expense Ratio. I should have just gone for simplicity and bought nothing but VT. I'd recommend 100% VT to anyone who wants to buy stocks.
Volkl_One
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Re: VT as single fund, now post covid recession

Post by Volkl_One »

I tax loss harvested my VTI and VXUS during the Covid dip and now half of my taxable investments and SIMPLE IRA are in VT.

I love the simplicity and would recommend it for that reason, but should the chance to change back to VTI and VXUS arise, I'll take it for the lower expense ratio and reallocating benefits.
bogledogle87
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Re: VT as single fund, now post covid recession

Post by bogledogle87 »

Tamalak wrote: Tue Sep 15, 2020 12:21 pm I own VXUS and VTI in proportion to world capitalization because of the lower total Expense Ratio. I should have just gone for simplicity and bought nothing but VT. I'd recommend 100% VT to anyone who wants to buy stocks.
I do the same with VTI + IXUS (slightly higher percentage of qualified dividends). My main motive was to leave some flexibility for tax loss harvesting into ITOT or VEU. There is an added bonus with the Foreign Tax Credit by separating international.

That said, these are all pretty minor details and it would probably be simpler overall with VT. Most of my investments are in sheltered accounts in VTWAX that lack these perks anyway, which i am 100% okay with.
VTWAX and chill
aristotelian
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Re: VT as single fund, now post covid recession

Post by aristotelian »

The biggest issue with VT in taxable account is you lose the foreign tax credit due to international making up less than 50% of the fund. With US markets once again outperforming in 2020, international markets have an even bigger gap to make up before VT becomes as tax efficient as VTI+VXUS.
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