I'm 100% international with VEU. Is this wise?

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panchilly
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I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 12:26 pm

100% of my stocks are in VEU right now. Is it worth adding US stocks given that the PE ratios are so much higher in the US?

In a way, I have gone "ALL IN" on International stocks. I'm taking additional risk by going so heavily into VEU but hoping to be rewarded for this risk by outsized returns.

I have been 100% international since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".
Last edited by panchilly on Fri Dec 01, 2017 1:53 pm, edited 4 times in total.

Durzo
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Re: I'm 100% international with VEU

Post by Durzo » Fri Dec 01, 2017 1:34 pm

panchilly wrote:
Fri Dec 01, 2017 12:26 pm
100% of my stocks are in VEU right now.
Why did you exclude US stocks? Why not 50-50 to better capture the market?

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JoMoney
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Re: I'm 100% international with VEU

Post by JoMoney » Fri Dec 01, 2017 1:37 pm

Sounds like a cry for help.
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neilpilot
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Re: I'm 100% international with VEU

Post by neilpilot » Fri Dec 01, 2017 1:39 pm

Just a statement, with no direct or implied question. Certainly doesn't seem actionable.

BogleMelon
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Re: I'm 100% international with VEU

Post by BogleMelon » Fri Dec 01, 2017 1:40 pm

Thanks for letting us know. Do you have a question? If so you may try this format:
viewtopic.php?t=6212
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panchilly
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Re: I'm 100% international with VEU

Post by panchilly » Fri Dec 01, 2017 1:44 pm

BogleMelon wrote:
Fri Dec 01, 2017 1:40 pm
Thanks for letting us know. Do you have a question? If so you may try this format:
viewtopic.php?t=6212
i edited the post and made it a question.

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dwickenh
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Re: I'm 100% international with VEU. Is this wise?

Post by dwickenh » Fri Dec 01, 2017 1:47 pm

Were you 100% last year, or are you just 100% now due to this years great returns?
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

John Laurens
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Re: I'm 100% international with VEU. Is this wise?

Post by John Laurens » Fri Dec 01, 2017 1:51 pm

Why did you exclude foreign developed small caps and emerging market small caps? Weird.

Regards,
John

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 1:52 pm

dwickenh wrote:
Fri Dec 01, 2017 1:47 pm
Were you 100% last year, or are you just 100% now due to this years great returns?
Actually, I have been 100% since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".

avalpert
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Re: I'm 100% international with VEU. Is this wise?

Post by avalpert » Fri Dec 01, 2017 1:56 pm

No, it isn't wise to exclude about 50% of the global market from your equity holdings - might it work out for you, sure, but it isn't wise.

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daytona084
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Re: I'm 100% international with VEU. Is this wise?

Post by daytona084 » Fri Dec 01, 2017 2:27 pm

Basically you are talking about market timing. You are betting on higher returns for international than for US equities. You might be right or you might be wrong. Time will tell.

My investment policy statement does not instruct me to make changes based on PE ratios. So I don't pay attention.

bgf
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Re: I'm 100% international with VEU. Is this wise?

Post by bgf » Fri Dec 01, 2017 2:38 pm

the biggest concern i would have is currency risk. i generally dont worry about currency volatility given that my US-International split is basically 50-50, and, over the very long term, currency fluctuations tend to even out.

100% international stocks bought with US dollars is going to hurt a lot if the dollar strengthens. those internationals earnings will shrink based on currency alone.

if you are going to go 100% international, maybe you should do so through a currency hedged fund.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

retireearly
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Re: I'm 100% international with VEU. Is this wise?

Post by retireearly » Fri Dec 01, 2017 2:39 pm

Delete - duplicate post
Last edited by retireearly on Fri Dec 01, 2017 2:40 pm, edited 1 time in total.
Age:45, about to be single for first time since 1995. Kids 8/13. Current AA 70/30, Desired stock AA 50/50, overweight EM, Int SC and US SCV.

retireearly
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Re: I'm 100% international with VEU. Is this wise?

Post by retireearly » Fri Dec 01, 2017 2:40 pm

John Laurens wrote:
Fri Dec 01, 2017 1:51 pm
Why did you exclude foreign developed small caps and emerging market small caps? Weird.

Regards,
John

Yep, I'm more troubled by only having VEU with 90% large cap, 9.5 mid and .5 small, than I am about the 100% international stance!

I will play along with your valuation angle but argue that Int SC and EM have much better upside long term. At a minimum, you should not be overlooking them completely.

I really don't mind when people trying to outsmart the market by using valuation for reasoning - I am tilting Int about 55 Int, 45 US (of equity portion). Starting today, I too think that 20 years from now, $1 in all Int (esp. EM and SC) will be worth more than $1 in US stocks. That said, even I would only take that tilt so far because we really just don't know. US could really stay overvalued for another 20 years due to whatever and you would be missing out. Why not just tilt Int and if you believe (as do I) that US in overvalued, why not just reduce some exposure, or look to more value?
Age:45, about to be single for first time since 1995. Kids 8/13. Current AA 70/30, Desired stock AA 50/50, overweight EM, Int SC and US SCV.

dbr
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Re: I'm 100% international with VEU. Is this wise?

Post by dbr » Fri Dec 01, 2017 2:47 pm

panchilly wrote:
Fri Dec 01, 2017 12:26 pm

In a way, I have gone "ALL IN" on International stocks. I'm taking additional risk by going so heavily into VEU but hoping to be rewarded for this risk by outsized returns.
Why do you think you will get outsized returns and why to you think you are taking additional risk?

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dwickenh
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Re: I'm 100% international with VEU. Is this wise?

Post by dwickenh » Fri Dec 01, 2017 3:04 pm

panchilly wrote:
Fri Dec 01, 2017 1:52 pm
dwickenh wrote:
Fri Dec 01, 2017 1:47 pm
Were you 100% last year, or are you just 100% now due to this years great returns?
Actually, I have been 100% since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".
Good! Then you're actually just a gambler instead of someone chasing returns. You could do worse, but you could also do much better at mitigating risk. Obviously the risk is ok with you and if you lose 50-70% of your savings it is no problem.

I envy your "shoot from the hip" style.

Best of luck,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 3:08 pm

retireearly wrote:
Fri Dec 01, 2017 2:40 pm
John Laurens wrote:
Fri Dec 01, 2017 1:51 pm
Why did you exclude foreign developed small caps and emerging market small caps? Weird.

Regards,
John

Yep, I'm more troubled by only having VEU with 90% large cap, 9.5 mid and .5 small, than I am about the 100% international stance!

I will play along with your valuation angle but argue that Int SC and EM have much better upside long term. At a minimum, you should not be overlooking them completely.

I really don't mind when people trying to outsmart the market by using valuation for reasoning - I am tilting Int about 55 Int, 45 US (of equity portion). Starting today, I too think that 20 years from now, $1 in all Int (esp. EM and SC) will be worth more than $1 in US stocks. That said, even I would only take that tilt so far because we really just don't know. US could really stay overvalued for another 20 years due to whatever and you would be missing out. Why not just tilt Int and if you believe (as do I) that US in overvalued, why not just reduce some exposure, or look to more value?
What is your recommended holdings for a portfolio for 100% international?

brad.clarkston
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Re: I'm 100% international with VEU. Is this wise?

Post by brad.clarkston » Fri Dec 01, 2017 3:09 pm

retireearly wrote:
Fri Dec 01, 2017 2:40 pm
John Laurens wrote:
Fri Dec 01, 2017 1:51 pm
Why did you exclude foreign developed small caps and emerging market small caps? Weird.

Regards,
John

Yep, I'm more troubled by only having VEU with 90% large cap, 9.5 mid and .5 small, than I am about the 100% international stance!

I will play along with your valuation angle but argue that Int SC and EM have much better upside long term. At a minimum, you should not be overlooking them completely.

I really don't mind when people trying to outsmart the market by using valuation for reasoning - I am tilting Int about 55 Int, 45 US (of equity portion). Starting today, I too think that 20 years from now, $1 in all Int (esp. EM and SC) will be worth more than $1 in US stocks. That said, even I would only take that tilt so far because we really just don't know. US could really stay overvalued for another 20 years due to whatever and you would be missing out. Why not just tilt Int and if you believe (as do I) that US in overvalued, why not just reduce some exposure, or look to more value?
+1 this if I was going to go all in ex-US I would have to have access to DFA funds as well VUE just isn't a good one stop etf.

Something like this probably:
40% VFWAX - Vanguard FTSE All-World ex-US Index Fund Admiral - 0.11% ER
30% DEMSX - DFA Emerging Markets Small Cap I - 0.72% ER
30% DISVX - DFA International Small Cap Value I - 0.68% ER


That gets your spread a little more even across the average

Total Exposure (% of Stocks)
North America 5.87
Latin America 5.83
United Kingdom 9.55
Europe Developed 23.45
Europe Emerging 1.60
Africa/Middle East 2.98
Japan 15.57
Australasia 3.56
Asia Developed 14.55
Asia Emerging 17.04
Not Classified 0.00

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 3:13 pm

dwickenh wrote:
Fri Dec 01, 2017 3:04 pm
panchilly wrote:
Fri Dec 01, 2017 1:52 pm
dwickenh wrote:
Fri Dec 01, 2017 1:47 pm
Were you 100% last year, or are you just 100% now due to this years great returns?
Actually, I have been 100% since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".
Good! Then you're actually just a gambler instead of someone chasing returns. You could do worse, but you could also do much better at mitigating risk. Obviously the risk is ok with you and if you lose 50-70% of your savings it is no problem.

I envy your "shoot from the hip" style.

Best of luck,

Dan
I'd much rather be someone who takes calculated bets based on sound reasoning vs. a lemming who blindly invests based on what he hears from others. I have always been someone who thinks a little differently from the heard. International, in my opinion, has much less downside risk right now than US stocks with more upside potential. I've felt strongly about this for a while now which is why i decided to go heavily in.

A fund like VEU or VXUS is already incredibly diversified. It covers all industries and countries all over the globe.

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 3:21 pm

I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.

Also notice how i said 100% *OF* stocks not 100% stocks, obviously i'm not 100% in stocks but 100% of my stocks are international. I want to make that clear.

WhiteMaxima
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Re: I'm 100% international with VEU. Is this wise?

Post by WhiteMaxima » Fri Dec 01, 2017 3:24 pm

time will tell.

dbr
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Re: I'm 100% international with VEU. Is this wise?

Post by dbr » Fri Dec 01, 2017 3:31 pm

panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.

Also notice how i said 100% *OF* stocks not 100% stocks, obviously i'm not 100% in stocks but 100% of my stocks are international. I want to make that clear.
On the contrary to you being a gambler I am questioning why this would make any difference. I think the market timing comment comes from people trying to figure out a rationale for what you are doing when market timing is the only reason people imagine you would do this.

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triceratop
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Re: I'm 100% international with VEU. Is this wise?

Post by triceratop » Fri Dec 01, 2017 3:40 pm

panchilly wrote:
Fri Dec 01, 2017 1:52 pm
dwickenh wrote:
Fri Dec 01, 2017 1:47 pm
Were you 100% last year, or are you just 100% now due to this years great returns?
Actually, I have been 100% since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".
I would have switched to IXUS.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

jalbert
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Re: I'm 100% international with VEU. Is this wise?

Post by jalbert » Fri Dec 01, 2017 3:53 pm

panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.
How it turned out is that US stocks outperformed non-US stocks by about 40% in USD valuations from 1/1/2000 to present (comparing vtsmx to vgtsx).
Last edited by jalbert on Fri Dec 01, 2017 3:58 pm, edited 1 time in total.
Risk is not a guarantor of return.

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 3:56 pm

jalbert wrote:
Fri Dec 01, 2017 3:53 pm
panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.
How it turned out is that US stocks outperformed non-US stocks by about 40% in USD valuations from 1/1/2000 to present.
And that outperformance has resulted in the situation we have now - a period where international stocks are a relative bargain.

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triceratop
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Re: I'm 100% international with VEU. Is this wise?

Post by triceratop » Fri Dec 01, 2017 4:00 pm

panchilly wrote:
Fri Dec 01, 2017 3:56 pm
jalbert wrote:
Fri Dec 01, 2017 3:53 pm
panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.
How it turned out is that US stocks outperformed non-US stocks by about 40% in USD valuations from 1/1/2000 to present.
And that outperformance has resulted in the situation we have now - a period where international stocks are a relative bargain.
The point is your logic would lead you to behave the same way in 2000 leading to a subsequent 17 year underperformance by 40%.

Of course, that is just one of many possible outcomes. That is why I diversify.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

jalbert
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Re: I'm 100% international with VEU. Is this wise?

Post by jalbert » Fri Dec 01, 2017 4:00 pm

So were US stocks cheaper in 1999 then?
Risk is not a guarantor of return.

avalpert
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Re: I'm 100% international with VEU. Is this wise?

Post by avalpert » Fri Dec 01, 2017 4:06 pm

panchilly wrote:
Fri Dec 01, 2017 3:56 pm
jalbert wrote:
Fri Dec 01, 2017 3:53 pm
panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.
How it turned out is that US stocks outperformed non-US stocks by about 40% in USD valuations from 1/1/2000 to present.
And that outperformance has resulted in the situation we have now - a period where international stocks are a relative bargain.
Huh? You seem to have twisted yourself into a knot - was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?

Look, I think its great you think you can out guess the market - I think it's rather weak to do it at such a broad level, I mean if you are going to make a bet like this you should make one that can make a big difference and target a really narrow section be it a single country, small number of stocks, sector etc but whatever - more power to you.

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 4:20 pm

avalpert wrote:
Fri Dec 01, 2017 4:06 pm
was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?
YES

panchilly
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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 4:25 pm

triceratop wrote:
Fri Dec 01, 2017 4:00 pm
panchilly wrote:
Fri Dec 01, 2017 3:56 pm
jalbert wrote:
Fri Dec 01, 2017 3:53 pm
panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.
How it turned out is that US stocks outperformed non-US stocks by about 40% in USD valuations from 1/1/2000 to present.
And that outperformance has resulted in the situation we have now - a period where international stocks are a relative bargain.
The point is your logic would lead you to behave the same way in 2000 leading to a subsequent 17 year underperformance by 40%.

Of course, that is just one of many possible outcomes. That is why I diversify.
Yes, that logic would have had me heavily in international in the year 2000. Obviously US has beaten international since that time but past performance isn't an indicator of future performance. I like the valuations now in International.

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dwickenh
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Re: I'm 100% international with VEU. Is this wise?

Post by dwickenh » Fri Dec 01, 2017 5:12 pm

panchilly wrote:
Fri Dec 01, 2017 3:21 pm
I find it real funny that folks think it is perfectly OK to have 100% of your stocks in US equities but accuse someone who is 100% international of being a gambler. US stocks haven't been this expensive since 1999/2000.. Look how that turned out.

Also notice how i said 100% *OF* stocks not 100% stocks, obviously i'm not 100% in stocks but 100% of my stocks are international. I want to make that clear.
Now that makes a difference- why didn't you say that sooner!!!!

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

avalpert
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Re: I'm 100% international with VEU. Is this wise?

Post by avalpert » Fri Dec 01, 2017 5:15 pm

panchilly wrote:
Fri Dec 01, 2017 4:20 pm
avalpert wrote:
Fri Dec 01, 2017 4:06 pm
was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?
YES
Yes to both?

retireearly
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Re: I'm 100% international with VEU. Is this wise?

Post by retireearly » Fri Dec 01, 2017 5:29 pm

panchilly wrote:
Fri Dec 01, 2017 3:08 pm
retireearly wrote:
Fri Dec 01, 2017 2:40 pm
John Laurens wrote:
Fri Dec 01, 2017 1:51 pm
Why did you exclude foreign developed small caps and emerging market small caps? Weird.

Regards,
John

Yep, I'm more troubled by only having VEU with 90% large cap, 9.5 mid and .5 small, than I am about the 100% international stance!

I will play along with your valuation angle but argue that Int SC and EM have much better upside long term. At a minimum, you should not be overlooking them completely.

I really don't mind when people trying to outsmart the market by using valuation for reasoning - I am tilting Int about 55 Int, 45 US (of equity portion). Starting today, I too think that 20 years from now, $1 in all Int (esp. EM and SC) will be worth more than $1 in US stocks. That said, even I would only take that tilt so far because we really just don't know. US could really stay overvalued for another 20 years due to whatever and you would be missing out. Why not just tilt Int and if you believe (as do I) that US in overvalued, why not just reduce some exposure, or look to more value?
What is your recommended holdings for a portfolio for 100% international?

My International portfolio is:
VTIAX
Van Smal Cap - VSS.
VEMAX (VWO would work too).
EWX - About 4% of my total portfolio. However, I'm odd and it bothers me every day that I pay so much in OE's (I think it's around 62 basis points).*

*I've contacted Vanguard several times requesting admiral share fund for Int Small Cap, a good Int Sm Cap value, cheaper Int Value, etc.

I also have some Fid Total Int in some workplace/401K but the way

I tilt EM and Small Cap (both US/INT), so if I were to be force to have an all INT portfolio, it would something like this:

VTIAX 40%
20% VEMAX
10% EWX (though I would debate every day about just going to 30% vemax)
30% VSS

I know many like DFA but it seems like a lot of work and they aren't cheap. If I had access at work, I would probably get rid of EWX and consider one of their value products!
Age:45, about to be single for first time since 1995. Kids 8/13. Current AA 70/30, Desired stock AA 50/50, overweight EM, Int SC and US SCV.

retireearly
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Re: I'm 100% international with VEU. Is this wise?

Post by retireearly » Fri Dec 01, 2017 5:32 pm

[/quote]


+1 this if I was going to go all in ex-US I would have to have access to DFA funds as well VUE just isn't a good one stop etf.

Something like this probably:
40% VFWAX - Vanguard FTSE All-World ex-US Index Fund Admiral - 0.11% ER
30% DEMSX - DFA Emerging Markets Small Cap I - 0.72% ER
30% DISVX - DFA International Small Cap Value I - 0.68% ER


[/quote]

Your AA, assuming an all INT AA, is right around where I'd want it with overweighted EM, SCV...however, I don't know if I could sleep with 60% of my funds with an average of 70 basis points OE!
Age:45, about to be single for first time since 1995. Kids 8/13. Current AA 70/30, Desired stock AA 50/50, overweight EM, Int SC and US SCV.

brad.clarkston
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Re: I'm 100% international with VEU. Is this wise?

Post by brad.clarkston » Fri Dec 01, 2017 6:01 pm

retireearly wrote:
Fri Dec 01, 2017 5:29 pm

My International portfolio is:
VTIAX
Van Smal Cap - VSS.
VEMAX (VWO would work too).
EWX - About 4% of my total portfolio. However, I'm odd and it bothers me every day that I pay so much in OE's (I think it's around 62 basis points).*

*I've contacted Vanguard several times requesting admiral share fund for Int Small Cap, a good Int Sm Cap value, cheaper Int Value, etc.

I also have some Fid Total Int in some workplace/401K but the way

I tilt EM and Small Cap (both US/INT), so if I were to be force to have an all INT portfolio, it would something like this:

VTIAX 40%
20% VEMAX
10% EWX (though I would debate every day about just going to 30% vemax)
30% VSS

I know many like DFA but it seems like a lot of work and they aren't cheap. If I had access at work, I would probably get rid of EWX and consider one of their value products!
Yea I'd worry about EWX myself as it's almost 60% medium cap which I'll give it is better than any of the VG "ex-US/EM" funds.
At least VEMAX doesn't pretend to be anything but a Giant and Large fund. VG and Fid really needs to get some good ex-US small cap and EM funds going.

The only DFA funds I'm fond of are:

DFSVX - DFA US Small Cap Value I - 0.52% ER
DEMSX - DFA Emerging Markets Small Cap I - 0.72% ER
DISVX - DFA International Small Cap Value I - 0.68% ER

Not worth the price of private admission but if you can get them in a work 401k the ER is not something to cry over.

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Re: I'm 100% international with VEU. Is this wise?

Post by brad.clarkston » Fri Dec 01, 2017 6:19 pm

retireearly wrote:
Fri Dec 01, 2017 5:32 pm


+1 this if I was going to go all in ex-US I would have to have access to DFA funds as well VUE just isn't a good one stop etf.

Something like this probably:
40% VFWAX - Vanguard FTSE All-World ex-US Index Fund Admiral - 0.11% ER
30% DEMSX - DFA Emerging Markets Small Cap I - 0.72% ER
30% DISVX - DFA International Small Cap Value I - 0.68% ER


Your AA, assuming an all INT AA, is right around where I'd want it with over weighted EM, SCV...however, I don't know if I could sleep with 60% of my funds with an average of 70 basis points OE!
True but keep in mind those are actively managed non-indexed funds with nearly as good a track record as VG.
While there large cap funds have done the best in the past the specialty super tilt ex-US SCV and EMSCV are (IMHO) the best on the market.

While I'm normally in the super low ER index wagon I make exceptions for a few DFA & PIMCO funds (I've owned PONDX in the past and may go back depending on crazy market things).

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Re: I'm 100% international with VEU. Is this wise?

Post by saltycaper » Fri Dec 01, 2017 6:20 pm

I don't think it's wise. And I don't know what "complete the play" means.
Quod vitae sectabor iter?

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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 6:22 pm

avalpert wrote:
Fri Dec 01, 2017 5:15 pm
panchilly wrote:
Fri Dec 01, 2017 4:20 pm
avalpert wrote:
Fri Dec 01, 2017 4:06 pm
was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?
YES
Yes to both?
I don't pretend I can predict when market will turn, so I just focus on investing where i see the greatest value. Over the long run, the value will win out every time.

I just got some money today from an ESPP that is ready to invest. Why put that in US stocks just for the sake of some academic diversification guide? I'll put that money where I think i can get the most gain and have the most downside protection. I'll be putting this money toward my international holdings.

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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 6:25 pm

saltycaper wrote:
Fri Dec 01, 2017 6:20 pm
I don't think it's wise. And I don't know what "complete the play" means.
what do you think it means?

It means to see the strategy through to the end. The end, in this case, would be such a time where international does not offer a substantial value differential vs domestic holdings.

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Re: I'm 100% international with VEU. Is this wise?

Post by KyleAAA » Fri Dec 01, 2017 6:26 pm

I don’t believe it’s wise to market time market segments based on PE, no.

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Re: I'm 100% international with VEU. Is this wise?

Post by whodidntante » Fri Dec 01, 2017 6:28 pm

Right now, I think it is more rational to exclude US stocks than to exclude foreign stocks. But neither approach is wise.

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Re: I'm 100% international with VEU. Is this wise?

Post by saltycaper » Fri Dec 01, 2017 6:28 pm

panchilly wrote:
Fri Dec 01, 2017 6:25 pm

The end, in this case, would be such a time where international does not offer a substantial value differential vs domestic holdings.
How will you know when that is?
Quod vitae sectabor iter?

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Re: I'm 100% international with VEU. Is this wise?

Post by avalpert » Fri Dec 01, 2017 6:29 pm

panchilly wrote:
Fri Dec 01, 2017 6:22 pm
avalpert wrote:
Fri Dec 01, 2017 5:15 pm
panchilly wrote:
Fri Dec 01, 2017 4:20 pm
avalpert wrote:
Fri Dec 01, 2017 4:06 pm
was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?
YES
Yes to both?
I don't pretend I can predict when market will turn, so I just focus on investing where i see the greatest value. Over the long run, the value will win out every time.

I just got some money today from an ESPP that is ready to invest. Why put that in US stocks just for the sake of some academic diversification guide?
Well, mostly because as you said you can't predict when the market will turn and i don't know why you think you are better at seeing the greatest value than the rest of the market that has set the balance of prices where they are today. I mean, you just said this situation is reminiscent to 199 and US subsequently considerably outperformed the world for at least 18 years - now maybe in the long run 'value' (as seen by you) will win out, but in the long run we are all dead.

Now, like I said above, if you do want to make a bet on what's undervalued more power to you - but you should at least have enough strength in your convictions to make it a more concentrated bet than broadly investing in half of the world's markets - that just seems like the worst of all worlds.

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Re: I'm 100% international with VEU. Is this wise?

Post by panchilly » Fri Dec 01, 2017 6:32 pm

avalpert wrote:
Fri Dec 01, 2017 6:29 pm
panchilly wrote:
Fri Dec 01, 2017 6:22 pm
avalpert wrote:
Fri Dec 01, 2017 5:15 pm
panchilly wrote:
Fri Dec 01, 2017 4:20 pm
avalpert wrote:
Fri Dec 01, 2017 4:06 pm
was bringing up 1999 supposed to be a warning about the risk of US valuations or a premonition that we are on the verge of another period of huge US outperformance?
YES
Yes to both?
I don't pretend I can predict when market will turn, so I just focus on investing where i see the greatest value. Over the long run, the value will win out every time.

I just got some money today from an ESPP that is ready to invest. Why put that in US stocks just for the sake of some academic diversification guide?
Well, mostly because as you said you can't predict when the market will turn and i don't know why you think you are better at seeing the greatest value than the rest of the market that has set the balance of prices where they are today. I mean, you just said this situation is reminiscent to 199 and US subsequently considerably outperformed the world for at least 18 years - now maybe in the long run 'value' (as seen by you) will win out, but in the long run we are all dead.

Now, like I said above, if you do want to make a bet on what's undervalued more power to you - but you should at least have enough strength in your convictions to make it a more concentrated bet than broadly investing in half of the world's markets - that just seems like the worst of all worlds.
THe worst of all worlds according to you is up 22% YTD.

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Re: I'm 100% international with VEU. Is this wise?

Post by H-Town » Fri Dec 01, 2017 6:44 pm

panchilly wrote:
Fri Dec 01, 2017 12:26 pm
100% of my stocks are in VEU right now. Is it worth adding US stocks given that the PE ratios are so much higher in the US?

In a way, I have gone "ALL IN" on International stocks. I'm taking additional risk by going so heavily into VEU but hoping to be rewarded for this risk by outsized returns.

I have been 100% international since summer 2015. I tax lost harvested EOY 2015 after it went down a bit. Converted from VXUS -> VEU.

I was early, but over the past year the stock has started to pop. I'm going to continue to hold to "complete the play".
Is it wise? No. I ran backtest on VEU and my portfolio from 2015 until now. Yours is under-performing.

Should you go back to US stocks? No. I don't think that's your intention at all. Keep holding your 100% international.

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Re: I'm 100% international with VEU. Is this wise?

Post by jalbert » Fri Dec 01, 2017 7:40 pm

I don't pretend I can predict when market will turn, so I just focus on investing where i see the greatest value. Over the long run, the value will win out every time.
The question to ask is why are US stocks priced at a larger PE multiple? The institutional investors who drive market values are very sophisticated in their analysis, not reckkess in their pricing models. This leads to the belief that the market is pricing in a larger risk premium for non-US stocks right now, that is, a lower probability that non-US stocks will hit their revenue forecasts.

Thus, it is a mistake to assume that the lower P/E equity class will win out rvery time. They may well win, but that is an uncertain future outcome regardless of time horizon.
Last edited by jalbert on Sat Dec 02, 2017 2:32 am, edited 1 time in total.
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Re: I'm 100% international with VEU. Is this wise?

Post by LadyGeek » Fri Dec 01, 2017 9:23 pm

This thread is now in the Investing - Help with Personal Investments forum (asset allocation).
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Re: I'm 100% international with VEU. Is this wise?

Post by Longtermgrowth » Sat Dec 02, 2017 3:04 am

I would want more small caps via at least a low cost blend fund like VSS. They should derive more revenue from their local economies than the multinational large caps, and have less correlation to U.S. equities.

Also, going past market cap weight international is a huge bet, that historically hasn't paid off as far as I know. Maybe listening a bit more to Buffett's comments about betting against the U.S., the most powerful country in the world, would be of benefit...

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Re: I'm 100% international with VEU. Is this wise?

Post by JoMoney » Sat Dec 02, 2017 3:22 am

Longtermgrowth wrote:
Sat Dec 02, 2017 3:04 am
...Maybe listening a bit more to Buffett's comments about betting against the U.S., the most powerful country in the world, would be of benefit...
Maybe... maybe not... but it definitely removes the potential for regret if you're using the S&P500 as a benchmark. If you're betting on VEU as an active bet that it will outperform the S&P500 you may be right, you may be wrong... you might have regret. If you're investing in the S&P500 and don't pay VEU any particular attention (at least not any more so than any of the thousands of other potential portfolios/indices/stocks) it's just lost in the noise of all the other stuff, some of which did better, some of which didn't.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: I'm 100% international with VEU. Is this wise?

Post by Longtermgrowth » Sat Dec 02, 2017 5:57 am

JoMoney wrote:
Sat Dec 02, 2017 3:22 am
Longtermgrowth wrote:
Sat Dec 02, 2017 3:04 am
...Maybe listening a bit more to Buffett's comments about betting against the U.S., the most powerful country in the world, would be of benefit...
Maybe... maybe not... but it definitely removes the potential for regret if you're using the S&P500 as a benchmark. If you're betting on VEU as an active bet that it will outperform the S&P500 you may be right, you may be wrong... you might have regret. If you're investing in the S&P500 and don't pay VEU any particular attention (at least not any more so than any of the thousands of other potential portfolios/indices/stocks) it's just lost in the noise of all the other stuff, some of which did better, some of which didn't.
Indeed. Unfortunately none of us can tell the future, and the best bet is to stick to market cap weighting for the diversification. I for one am no where near there though, partly because of tax considerations. I'm way overweight U.S., but I'm alright with that :beer

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