U.S. & International Allocation

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
BlackHat
Posts: 84
Joined: Tue Feb 14, 2017 1:47 pm

Re: U.S. & International Allocation

Post by BlackHat » Mon Feb 12, 2018 10:55 pm

triceratop wrote:
Mon Feb 12, 2018 9:36 pm
BlackHat wrote:
Mon Feb 12, 2018 9:00 pm
That's supposedly how Jack Bogle set Vanguard up. I'm still not sold on international. Lots of the people who are selling you a product recommend international. Most people who offer free advice say you don't need international. Makes me wonder is all. :confused
This post uses really flimsy "logic". The word "supposedly" is doing a lot of subtle work here -- if you're going to use a loaded word like that please find a little data to support the statement it is meant to convey, that some asset manager somewhere is making more money off of your international investments than they would if you invested in the US market.

"Lots of the people who are selling you a product recommend international"

This is called guilt by association. Lots of people who aren't try to sell you a product also recommend international. The Bogleheads.org forum is not trying to sell you a product and many here recommend international. Many posters (myself included) hold international at full market weight.
Ah, I apologise. I should do more research and watch my language more. Sorry again.
“Life is really simple, but we insist on making it complicated.” -- Confucius

RRAAYY3
Posts: 926
Joined: Thu Jan 17, 2013 12:32 pm

Re: U.S. & International Allocation

Post by RRAAYY3 » Mon Feb 12, 2018 11:04 pm

BlackHat wrote:
Mon Feb 12, 2018 10:55 pm
triceratop wrote:
Mon Feb 12, 2018 9:36 pm
BlackHat wrote:
Mon Feb 12, 2018 9:00 pm
That's supposedly how Jack Bogle set Vanguard up. I'm still not sold on international. Lots of the people who are selling you a product recommend international. Most people who offer free advice say you don't need international. Makes me wonder is all. :confused
This post uses really flimsy "logic". The word "supposedly" is doing a lot of subtle work here -- if you're going to use a loaded word like that please find a little data to support the statement it is meant to convey, that some asset manager somewhere is making more money off of your international investments than they would if you invested in the US market.

"Lots of the people who are selling you a product recommend international"

This is called guilt by association. Lots of people who aren't try to sell you a product also recommend international. The Bogleheads.org forum is not trying to sell you a product and many here recommend international. Many posters (myself included) hold international at full market weight.
Ah, I apologise. I should do more research and watch my language more. Sorry again.
Just click the link I posted. I don’t work for Fidelity.

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triceratop
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Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: U.S. & International Allocation

Post by triceratop » Mon Feb 12, 2018 11:23 pm

RRAAYY3 wrote:
Mon Feb 12, 2018 11:04 pm
BlackHat wrote:
Mon Feb 12, 2018 10:55 pm
triceratop wrote:
Mon Feb 12, 2018 9:36 pm
BlackHat wrote:
Mon Feb 12, 2018 9:00 pm
That's supposedly how Jack Bogle set Vanguard up. I'm still not sold on international. Lots of the people who are selling you a product recommend international. Most people who offer free advice say you don't need international. Makes me wonder is all. :confused
This post uses really flimsy "logic". The word "supposedly" is doing a lot of subtle work here -- if you're going to use a loaded word like that please find a little data to support the statement it is meant to convey, that some asset manager somewhere is making more money off of your international investments than they would if you invested in the US market.

"Lots of the people who are selling you a product recommend international"

This is called guilt by association. Lots of people who aren't try to sell you a product also recommend international. The Bogleheads.org forum is not trying to sell you a product and many here recommend international. Many posters (myself included) hold international at full market weight.
Ah, I apologise. I should do more research and watch my language more. Sorry again.
Just click the link I posted. I don’t work for Fidelity.
Myth #5 is not actually a myth. In fact from the 2017 mid-year SPIVA scorecard:

Image

I am sure Fidelity wants their clients to think it is a myth, though, so they buy expensive active funds from Fidelity and make the Johnson family rich(er). This shows that sometimes the skepticism showed by BlackHat is warranted; I just prefer it to be evidence-based skepticism.

I definitely don't work for Fidelity. :wink:
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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zTurtle
Posts: 6
Joined: Mon Feb 12, 2018 12:38 pm

Re: U.S. & International Allocation

Post by zTurtle » Tue Feb 13, 2018 2:00 am

abuss368 wrote:
Sat Nov 04, 2017 8:10 pm
To take it one step forward, could anyone foresee the Target and LifeStrategy funds replace Total Stock and Total International with Total World? Never say never, however if Vanguard made this change, I would suspect this would have tax impact to investors who held these funds in a taxable account. Further, this change would probably result in higher expense ratios for Total Stock and Total International.
Interesting prediction, I agree Vanguard seems to be heading in this direction! True that increasing International would have tax impact to investors, but they already decided they are ok with at least some non-US stocks. I recently went through this debate with myself, and decided to go US-only in my Taxable account, using Balanced Index Fund. I will be mad if they add non-US stocks to that fund, that would really be "pushing" international on investors who probably don't want it.

RRAAYY3
Posts: 926
Joined: Thu Jan 17, 2013 12:32 pm

Re: U.S. & International Allocation

Post by RRAAYY3 » Tue Feb 13, 2018 8:02 am

I thought Total Int’l was tax efficient?

bgf
Posts: 607
Joined: Fri Nov 10, 2017 9:35 am

Re: U.S. & International Allocation

Post by bgf » Tue Feb 13, 2018 8:14 am

I'm at 55-45, with 5% US REITs and 5% Int'l REITs included. the remaining 40% of Int'l is split equally between developed and emerging.

in anti-bogle fashion, part of my US allocation includes some individual stocks.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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pokebowl
Posts: 204
Joined: Sat Dec 17, 2016 7:22 pm
Location: The Orion Spur of the Milky Way galaxy.

Re: U.S. & International Allocation

Post by pokebowl » Tue Feb 13, 2018 11:26 pm

RRAAYY3 wrote:
Tue Feb 13, 2018 8:02 am
I thought Total Int’l was tax efficient?
Total international is in the sense that you can claim the FTC as well as take advantage of the treatment of taxes against equity holdings versus say holding bonds or another asset that is treated as simply income. Is total international the best international fund to hold in taxable? Not at all, better alternatives exist to help lower the tax drag, even more. In addition as your fund grows and you cross certain tax thresholds, you then get to deal with IRS Form 1116 and the AMT come tax time.
There is nothing more expensive than something offered for free.

rgs92
Posts: 2165
Joined: Mon Mar 02, 2009 8:00 pm

Re: U.S. & International Allocation

Post by rgs92 » Fri Apr 06, 2018 8:35 am

I'm thinking this tariff issue is a good example of why international exposure is good. International stocks seem to be holding up much better in this period. So volatility is reduced, which is good. The domestic and foreign markets definitely don't march together all the time.

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