Boy it sure does, especially recently. I don't like calculating where I'd be if I had gone all US instead of world cap.
Not even tempted to change it, though. Stay the course
In the past tense, that was correct. I am not certain at all about the future.
I actually did. No I'm not tempted. Granted, I've only been invested since Sept. 2015. Domestic REAL returns in those less than three years have been 40%. International 20%. Mine 30%. Life is goodcolumbia wrote: ↑Tue Jun 19, 2018 5:19 pm
If you actually do calculate it, you might be tempted.
I agree.
my bet is that they will move to market cap (VT) which is the optimal choice
Fidelity does have a total international stock index fund.Quercus Palustris wrote: ↑Sun Mar 17, 2019 3:28 pm 69/31 US/ex-US (core-4 Total Economy portfolio).
AFAIK Fidelity doesn't have a Total Market fund (ACWI/VT), maybe that's why?
+1ohai wrote: ↑Sun Mar 17, 2019 4:04 pm The main reason for US outperformance over the past 10-15 years has been the rise of tech giants like Amazon and Facebook. There's no such thing as this in Europe, Japan or other countries. The most valuable company in Europe today is Nestle. Consumer staples like this are not known for explosive growth. Anyway, if you don't think Amazon or Facebook can continue to lead market gains, you might be convinced to reconsider a high US asset allocation.
For me though, I am convinced that US deserves more generous valuation and is thus chronically underpriced relative to other countries. For one thing, very few political events seem to be able to derail the US stock market, as 1) corporate interests drive more of US government than most developed countries, and 2) the checks and balance system in the US is far better than any other major economy's. On top of that, Harvard and Stanford business schools are still producing the world's best management and most effective corporate culture. Every time I've had first hand experience dealing with European management in my industry, it's been a total joke compared to US companies. Finally, US people are far more enterprising than Japan or Europe, even in big companies. The next industry defining change in any field is more likely to come from the US than anywhere else, just like it has been before.
I understand that I am a little biased, but interestingly, some very intelligent people who I respect (for instance Mohd El Erian) share this POV.
100% U.S. equities. 0% International equities. Very happy with my results.kpanghmc wrote: ↑Fri Mar 09, 2007 12:50 pm [restarted thread. Check posting dates before replying - admin alex]
Just curious how other Bogleheads have their U.S.:International ratio set up. I'm currently at 2:1 but I'm tempted to cap weight and go 1:1. After all, if I believe in cap weighting my U.S. equities, why not cap weight my global equities as well?
While the above is true today, it wasn’t always so. Does the above sound like chasing past performance to anyone else?ohai wrote: ↑Sun Mar 17, 2019 4:04 pm The main reason for US outperformance over the past 10-15 years has been the rise of tech giants like Amazon and Facebook. There's no such thing as this in Europe, Japan or other countries. The most valuable company in Europe today is Nestle. Consumer staples like this are not known for explosive growth. Anyway, if you don't think Amazon or Facebook can continue to lead market gains, you might be convinced to reconsider a high US asset allocation.
For me though, I am convinced that US deserves more generous valuation and is thus chronically underpriced relative to other countries. For one thing, very few political events seem to be able to derail the US stock market, as 1) corporate interests drive more of US government than most developed countries, and 2) the checks and balance system in the US is far better than any other major economy's. On top of that, Harvard and Stanford business schools are still producing the world's best management and most effective corporate culture. Every time I've had first hand experience dealing with European management in my industry, it's been a total joke compared to US companies. Finally, US people are far more enterprising than Japan or Europe, even in big companies. The next industry defining change in any field is more likely to come from the US than anywhere else, just like it has been before.
I understand that I am a little biased, but interestingly, some very intelligent people who I respect (for instance Mohd El Erian) share this POV.
I think a lot of this is true today. However, I believe the U.S. is currently going through a dramatic cultural change which is going translate into a dramatic political change in 2020 or 2024 at the latest where a lot of these advantages will start to disappear. The U.S. is going to go through a dramatic transformation and become a much different country than what it's been so far. I don't intend this to veer into politics per forum rules, so I will just leave it at that. But I think the writing is writing is on the wall. In addition, I feel like the dollar is going to weaken due for years to come due to the high debt and deficits which are going to worsen (how do we have a 1.2 trillion deficit in a 'growing economy'? What happens in a recession?). I see many investors fleeing the U.S. for better international opportunities. Global market cap weight investing makes more sense than ever to me.ohai wrote: ↑Sun Mar 17, 2019 4:04 pm The main reason for US outperformance over the past 10-15 years has been the rise of tech giants like Amazon and Facebook. There's no such thing as this in Europe, Japan or other countries. The most valuable company in Europe today is Nestle. Consumer staples like this are not known for explosive growth. Anyway, if you don't think Amazon or Facebook can continue to lead market gains, you might be convinced to reconsider a high US asset allocation.
For me though, I am convinced that US deserves more generous valuation and is thus chronically underpriced relative to other countries. For one thing, very few political events seem to be able to derail the US stock market, as 1) corporate interests drive more of US government than most developed countries, and 2) the checks and balance system in the US is far better than any other major economy's. On top of that, Harvard and Stanford business schools are still producing the world's best management and most effective corporate culture. Every time I've had first hand experience dealing with European management in my industry, it's been a total joke compared to US companies. Finally, US people are far more enterprising than Japan or Europe, even in big companies. The next industry defining change in any field is more likely to come from the US than anywhere else, just like it has been before.
I understand that I am a little biased, but interestingly, some very intelligent people who I respect (for instance Mohd El Erian) share this POV.
It certainly does. Much like expecting higher returns from stocks than from bonds does, but it still seems to work much of the time. (I also don't worry about "confusing strategy with outcome", investing like an old person, or supposedly not having travelled enough, etc.)DosCommas wrote: ↑Sun Mar 17, 2019 4:53 pmWhile the above is true today, it wasn’t always so. Does the above sound like chasing past performance to anyone else?ohai wrote: ↑Sun Mar 17, 2019 4:04 pm The main reason for US outperformance over the past 10-15 years has been the rise of tech giants like Amazon and Facebook. There's no such thing as this in Europe, Japan or other countries. The most valuable company in Europe today is Nestle. Consumer staples like this are not known for explosive growth. Anyway, if you don't think Amazon or Facebook can continue to lead market gains, you might be convinced to reconsider a high US asset allocation.
For me though, I am convinced that US deserves more generous valuation and is thus chronically underpriced relative to other countries. For one thing, very few political events seem to be able to derail the US stock market, as 1) corporate interests drive more of US government than most developed countries, and 2) the checks and balance system in the US is far better than any other major economy's. On top of that, Harvard and Stanford business schools are still producing the world's best management and most effective corporate culture. Every time I've had first hand experience dealing with European management in my industry, it's been a total joke compared to US companies. Finally, US people are far more enterprising than Japan or Europe, even in big companies. The next industry defining change in any field is more likely to come from the US than anywhere else, just like it has been before.
I understand that I am a little biased, but interestingly, some very intelligent people who I respect (for instance Mohd El Erian) share this POV.
For every one of these charts there are other charts/tables that show a different picture. Is there a definitive chart that compares the total US market vs total international over the last 50+ years? or is this it?Que1999 wrote: ↑Sun Mar 17, 2019 5:53 pm
I'm done playing the guessing game. My investing is for the long-term and I'm confident there will be a reversion to the mean.... Going world market cap weighted, and recently came to this decision. I love the good ole' USA, but feel that home-country bias and recency bias are strong here.
Remember, investing is for the longgggg-term.....
Good luck to all, but I'm confident in the worlds economy first and foremost.
The end of the second sentence significantly contradicts the first sentence.I'm done playing the guessing game. My investing is for the long-term and I'm confident there will be a reversion to the mean.
If saying that I'm no longer playing the guessing game with US-only investing(which is the context I was using it in and how I used to invest) is contradicting the fact that I've moved to an all-world investment allocation, then OK I guess? Having confidence in the theory of mean reversion is hardly contradicting the fact that I was a US-only investor for many years and decided to move to an all-world allocation.
That chart is from this article by Fidelity...RJC wrote: ↑Sun Mar 17, 2019 7:28 pmFor every one of these charts there are other charts/tables that show a different picture. Is there a definitive chart that compares the total US market vs total international over the last 50+ years? or is this it?Que1999 wrote: ↑Sun Mar 17, 2019 5:53 pm
I'm done playing the guessing game. My investing is for the long-term and I'm confident there will be a reversion to the mean.... Going world market cap weighted, and recently came to this decision. I love the good ole' USA, but feel that home-country bias and recency bias are strong here.
Remember, investing is for the longgggg-term.....
Good luck to all, but I'm confident in the worlds economy first and foremost.
Thanks!
Que1999 wrote: ↑Sun Mar 17, 2019 8:03 pmThat chart is from this article by Fidelity...RJC wrote: ↑Sun Mar 17, 2019 7:28 pmFor every one of these charts there are other charts/tables that show a different picture. Is there a definitive chart that compares the total US market vs total international over the last 50+ years? or is this it?Que1999 wrote: ↑Sun Mar 17, 2019 5:53 pm
I'm done playing the guessing game. My investing is for the long-term and I'm confident there will be a reversion to the mean.... Going world market cap weighted, and recently came to this decision. I love the good ole' USA, but feel that home-country bias and recency bias are strong here.
Remember, investing is for the longgggg-term.....
Good luck to all, but I'm confident in the worlds economy first and foremost.
Thanks!
https://www.fidelity.com/viewpoints/inv ... ting-myths
Vanguard is going with 60/40 in their Target funds. They also published a fairly recent paper which seems to suggest global market cap weighting (at which point 60/40 is not far from really).columbia wrote: ↑Sun Mar 17, 2019 8:09 pmQue1999 wrote: ↑Sun Mar 17, 2019 8:03 pmThat chart is from this article by Fidelity...RJC wrote: ↑Sun Mar 17, 2019 7:28 pmFor every one of these charts there are other charts/tables that show a different picture. Is there a definitive chart that compares the total US market vs total international over the last 50+ years? or is this it?Que1999 wrote: ↑Sun Mar 17, 2019 5:53 pm
I'm done playing the guessing game. My investing is for the long-term and I'm confident there will be a reversion to the mean.... Going world market cap weighted, and recently came to this decision. I love the good ole' USA, but feel that home-country bias and recency bias are strong here.
Remember, investing is for the longgggg-term.....
Good luck to all, but I'm confident in the worlds economy first and foremost.
Thanks!
https://www.fidelity.com/viewpoints/inv ... ting-myths
Note their 70/30 remarks...which do not differ from Vanguard’s published remarks on the subject.
What am I going to be asked next: "what is your consumer discretionary to biotech ratio?"
I try very hard to avoid the bias toward selling that is well-documented when the opposing side is either in or gaining power. But man is it hard for me with what you are referencing. I'm trying to fortify my mental resolve not to make changes on this basis, though.DB2 wrote: ↑Sun Mar 17, 2019 5:37 pmI think a lot of this is true today. However, I believe the U.S. is currently going through a dramatic cultural change which is going translate into a dramatic political change in 2020 or 2024 at the latest where a lot of these advantages will start to disappear. The U.S. is going to go through a dramatic transformation and become a much different country than what it's been so far.
I understand and it's not easy to grapple with sometimes. And none of us have a crystal ball. But honestly, I feel like this is just one more reason for World Market Cap weighting as it does take off some stress for me in this regard.9-5 Suited wrote: ↑Mon Mar 18, 2019 12:50 pmI try very hard to avoid the bias toward selling that is well-documented when the opposing side is either in or gaining power. But man is it hard for me with what you are referencing. I'm trying to fortify my mental resolve not to make changes on this basis, though.DB2 wrote: ↑Sun Mar 17, 2019 5:37 pmI think a lot of this is true today. However, I believe the U.S. is currently going through a dramatic cultural change which is going translate into a dramatic political change in 2020 or 2024 at the latest where a lot of these advantages will start to disappear. The U.S. is going to go through a dramatic transformation and become a much different country than what it's been so far.