International stocks in free fall

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
protagonist
Posts: 5487
Joined: Sun Dec 26, 2010 12:47 pm

Re: International stocks in free fall

Post by protagonist » Fri Jun 24, 2016 2:45 pm

Simplegift wrote:Long-term, buy-and-hold investors of European equity will do fine. The Brexit vote (and others to come possibly) can’t compare with a global depression and two land wars fought on their home soil — which companies of the European nations overcame, with a 4.2% real equity return since 1900. It gives one faith in the resiliency of global capitalism.
It’s also worth noting that 50% of the revenue exposure of European companies today is from outside of Europe (North America, Pacific region and emerging markets) — with 27% from emerging markets, and growing.
Short-term suffering for European stocks certainly, but long-term rewards for the buy-hold-rebalance investor.
Interesting how poorly European bonds have done relative to T-bills for the "long-term" investor (a century) , not catching up until this century acc. to your chart. And stocks didn't do much either for the first half of the 20th century. You had volatility that was not compensated by performance, in both cases.

boglephreak
Posts: 441
Joined: Fri Apr 22, 2016 5:16 pm

Re: International stocks in free fall

Post by boglephreak » Fri Jun 24, 2016 2:50 pm

i was going to buy in a week, bought today instead. lets see if matters. i will be holding for decades so likely no significant effect in the long run. time, not timing (etc. etc.).

question: since i bought VTIAX. What rate do i get? The rate at the time i buy, or the rate at the end of the day, or some other rate/time? thanks.

User avatar
saltycaper
Posts: 2650
Joined: Thu Apr 24, 2014 8:47 pm
Location: The Tower

Re: International stocks in free fall

Post by saltycaper » Fri Jun 24, 2016 3:11 pm

protagonist wrote: Interesting how poorly European bonds have done relative to T-bills for the "long-term" investor (a century) , not catching up until this century acc. to your chart. And stocks didn't do much either for the first half of the 20th century. You had volatility that was not compensated by performance, in both cases.
Wars where millions die and entire sovereign states cease to exist tend to produce poor returns for those hosting the hostilities.
Quod vitae sectabor iter?

User avatar
saltycaper
Posts: 2650
Joined: Thu Apr 24, 2014 8:47 pm
Location: The Tower

Re: International stocks in free fall

Post by saltycaper » Fri Jun 24, 2016 3:12 pm

boglephreak wrote:question: since i bought VTIAX. What rate do i get? The rate at the time i buy, or the rate at the end of the day, or some other rate/time? thanks.
You will get the net asset value at market close today.
Quod vitae sectabor iter?

User avatar
SimpleGift
Posts: 3121
Joined: Tue Feb 08, 2011 3:45 pm
Location: Central Oregon

Re: International stocks in free fall

Post by SimpleGift » Fri Jun 24, 2016 3:25 pm

saltycaper wrote:
protagonist wrote: Interesting how poorly European bonds have done relative to T-bills for the "long-term" investor (a century) , not catching up until this century acc. to your chart. And stocks didn't do much either for the first half of the 20th century. You had volatility that was not compensated by performance, in both cases.
Wars where millions die and entire sovereign states cease to exist tend to produce poor returns for those hosting the hostilities.
World wars definitely produced poor returns for bonds, as protagonist points out, especially when the wars are followed by periods of hyperinflation. What’s remarkable is how relatively resilient stock markets have been historically, recovering rather quickly from major conflicts.
Cordially, Todd

Riley15
Posts: 150
Joined: Wed May 11, 2016 9:21 pm

Re: International stocks in free fall

Post by Riley15 » Fri Jun 24, 2016 4:07 pm

n00b wrote:I got caught in the crossfire whilst moving a significant portion of my domestic stock and all of my international stock to an account with slightly lower expenses. (Totally unaware of Brexit. I would have avoided moving during this time if I had known.)

My exit from the market landed on a low day and Mr. Market surged a bit while I was out for the transfer. I would have gladly bought back in at my exit price but didn't want to take my lumps so I set up some ETF limit-orders and hoped that volatility could get me back in at my exit price. That happened pretty quick on my international stocks but I had to wait a bit for my domestic order to execute. I got lucky with my domestic order this morning because the market opened a bit below my limit-order so I accidentally got a deal!
I am in the same kind of situation in the middle of a rollover. It's not really a deal if the market continues to drop further.

patrick
Posts: 1636
Joined: Fri Sep 04, 2009 3:39 am
Location: Mega-City One

Re: International stocks in free fall

Post by patrick » Fri Jun 24, 2016 5:24 pm

Here is an interesting data point to consider:

On August 8, 2011, then infamous "U.S. stocks in freefall" thread began. Here is the result of that thread, from the point of view of an investor who placed a mutual fund traade when the thread appeared (thus receiving the end of day prices):

On June 24, 2016, a $100,000 investment in Vanguard Total Stock Market Index Admiral had grown to $199,645. Yes, that includes today's losses.
On June 24, 2016, the thread had grown to 3004 posts.

Now a similar thread has started for international. Should we expect this thread to have a similar outcome over the next 1782 days as the US thread had over its 1782 days so far? If so, then we should see the following:

On May 11, 2021, an investment in Vanguard Total International should be worth about twice what it is today.
On May 21, 2021, this thread will also have about three thousand posts.

Which is not to say that I actually believe in such market timing. I will be sticking with the asset allocation I had selected before.

bayview
Posts: 1566
Joined: Thu Aug 02, 2012 7:05 pm
Location: WNC

Re: International stocks in free fall

Post by bayview » Fri Jun 24, 2016 5:32 pm

saltycaper wrote:
boglephreak wrote:question: since i bought VTIAX. What rate do i get? The rate at the time i buy, or the rate at the end of the day, or some other rate/time? thanks.
You will get the net asset value at market close today.
It's not the rate, it's the price, and that which shows at the end of the day, as saltycaper wrote.

Assuming that eventually the sun returns to rising in the east and setting in the west, you bought cheap.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

User avatar
JonnyDVM
Posts: 1606
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: International stocks in free fall

Post by JonnyDVM » Fri Jun 24, 2016 9:35 pm

Kevin M wrote:
Crow Hunter wrote: Then I get to work and on my first break, my hands nearly trembling with excitement, I pull up the VXUS ticker.

7%...... That's all? Really?

That is what it was last week.... :annoyed
Close enough to justify your disappointment, but as of now about 2% lower than the close last Friday. We should also consider that there was a $0.54 dividend paid on June 14.

Kevin
Cheer up governor. Monday's drop is yet to come. Tally ho!
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

User avatar
in_reality
Posts: 4529
Joined: Fri Jul 12, 2013 6:13 am

Re: International stocks in free fall

Post by in_reality » Fri Jun 24, 2016 10:44 pm

saltycaper wrote:
in_reality wrote:Sold 10K of a currency that jumped on the news, and will put it into international stocks when the wire comes through. Nothing much really ...
Is trading foreign currency part of your long-term strategy? Or do you hedge because you are somehow uniquely exposed? Obviously, not a lot of FX traders or talkers here.
No, I'm not trading currencies. It's impossible to know what to do I think.

Wife's exit package was in a foreign currency that was low by historical norms, so we are holding it but our frame of reference for what is normal may be outdated. She wants to continue holding and I chose to sell what amount I had.

User avatar
John151
Posts: 386
Joined: Fri Mar 02, 2007 6:03 pm

Re: International stocks in free fall

Post by John151 » Sat Jun 25, 2016 12:21 am

Why would anybody sell in a down market, unless it’s to harvest a tax loss? Even then, one should buy back in, choosing something that’s similar but not substantially identical.

At the moment, I don’t have any losses to harvest. I’m planning to buy instead.

User avatar
raven15
Posts: 362
Joined: Sun Nov 30, 2014 8:01 pm

Re: International stocks in free fall

Post by raven15 » Sat Jun 25, 2016 12:56 am

I recently (last week) opened an account at Vanguard and just got the money available today. I started a couple funds including developed markets ex-US with the fund minimum investments, and have a little more than half left. Any opinions on the best period of dollar cost averaging to take advantage of this? All at once this weekend? Daily? Weekly? Monthly is too long because I will have new funds available every month anyhow.
It's Time. Adding Interest.

crg11
Posts: 421
Joined: Sat Jan 04, 2014 8:16 am

Re: International stocks in free fall

Post by crg11 » Sat Jun 25, 2016 7:06 am

raven15 wrote:I recently (last week) opened an account at Vanguard and just got the money available today. I started a couple funds including developed markets ex-US with the fund minimum investments, and have a little more than half left. Any opinions on the best period of dollar cost averaging to take advantage of this? All at once this weekend? Daily? Weekly? Monthly is too long because I will have new funds available every month anyhow.
Just do it now. You don't know what the future brings and assuming you are keeping this money in for a long time, it doesn't matter if it is today or tomorrow or next week.

J295
Posts: 1747
Joined: Sun Jan 01, 2012 11:40 pm

Re: International stocks in free fall

Post by J295 » Sat Jun 25, 2016 7:08 am

No action. Our quarterly allocation review is 6-30-16. Honestly, didn't know there was anything going on market wise until Friday morning someone at golf told me on #1 fairway that the market futures were down 500 .... lost money on paper, but did start the round 2 under through 4 holes before Mr. Bogey showed up on #5 .... :D

User avatar
Johnnie
Posts: 512
Joined: Sat May 28, 2016 3:18 pm
Location: Michigan

Re: International stocks in free fall

Post by Johnnie » Sat Jun 25, 2016 8:52 am

rgs92 wrote:My take on this FWIW is that BREXIT was a symptom and not a cause. It's a symptom of the flat earth with the 3rd world of labor coming on board and flattening income and quality of life of the whole world's population, thus decreasing living standards for the Western world.

Europe is feeling the brunt of this because of their proximity to non-European societies and the lingering effects of the end of the Cold War 25 years ago.

So what is actionable in this? The US, being *relatively* more isolated, is also feeling this, but much less so than in Europe. Thus, I would not try to be a hero and try to buy a large amount of foreign equities. I would not go as far as Mr. Bogle says (basically zero international), but I would keep it under 10% of my total investment portfolio, or less than 20% of my equity portion.

+1 to flattening earth as underlying cause. Plus, I can sympathize with Brits groaning under the burden of EU's pettifogging regulators; many probably had thoughts along these lines: "He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance."

I'm in the process of transitioning from a mish-mash and no plan to buy and hold slice-'n-dice with 50 percent international by year end. This was a minor opportunity - I advanced the next tranche of DCAing into internationals by three days. :-)

I will admit though to becoming a bit chicken about going the full 50 percent vs. 40 percent international. The long term data supports it but it still feels bold.
"I know nothing."

User avatar
nedsaid
Posts: 10676
Joined: Fri Nov 23, 2012 12:33 pm

Re: International stocks in free fall

Post by nedsaid » Sat Jun 25, 2016 11:00 am

garlandwhizzer wrote:The time has come for EU governance to take a hard look in the mirror and to make hard political decisions that up to now they have avoided. Many people everywhere, more so in Europe than in the US, have not benefited from "the recovery" and feel they have lost control of their borders, their laws, their lives and livelihoods. Brexit was the first brick in the wall to fall but it will probably not be the last. It's going to be an interesting and challenging time in worldwide markets.

Garland Whizzer
The feelings people have about their governance is not just a UK phenomenon. It is the feeling of loss of control to an unelected regulatory regime. The feeling of the loss of control that Garland talks about exists here in the United States as well. I will leave it at that.
A fool and his money are good for business.

ImNotABot
Posts: 80
Joined: Wed Apr 20, 2016 3:26 pm

Re: International stocks in free fall

Post by ImNotABot » Sat Jun 25, 2016 1:10 pm

Well, a cpl months ago I lump summed 50% of my investible cash, and im in themiddle of DCA the rest over the nxt 8 months.

The activity yesterday actually brought my AA back very close to target, so I just combined a few DCA events and bought in with distribution matching my AA.

User avatar
abuss368
Posts: 13017
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: International stocks in free fall

Post by abuss368 » Mon Jun 27, 2016 11:04 pm

Back up the truck!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

User avatar
saltycaper
Posts: 2650
Joined: Thu Apr 24, 2014 8:47 pm
Location: The Tower

Re: International stocks in free fall

Post by saltycaper » Tue Jun 28, 2016 12:42 am

abuss368 wrote:Back up the truck!
Not ready for the truck. Maybe the little wire basket I attached to my 10-speed when I was 8.
Quod vitae sectabor iter?

User avatar
oldzey
Posts: 1108
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

Re: International stocks in free fall

Post by oldzey » Tue Jun 19, 2018 3:58 pm

saltycaper wrote:
Tue Jun 28, 2016 12:42 am
abuss368 wrote:Back up the truck!
Not ready for the truck. Maybe the little wire basket I attached to my 10-speed when I was 8.
Anyone back up the truck today? 8-)
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

truenorth418
Posts: 409
Joined: Wed Dec 19, 2012 7:38 am

Re: International stocks in free fall

Post by truenorth418 » Tue Jun 19, 2018 4:18 pm

Not today, but end of this month yes.

tesuzuki2002
Posts: 538
Joined: Fri Dec 11, 2015 12:40 pm

Re: International stocks in free fall

Post by tesuzuki2002 » Tue Jun 19, 2018 5:16 pm

oldzey wrote:
Tue Jun 19, 2018 3:58 pm
saltycaper wrote:
Tue Jun 28, 2016 12:42 am
abuss368 wrote:Back up the truck!
Not ready for the truck. Maybe the little wire basket I attached to my 10-speed when I was 8.
Anyone back up the truck today? 8-)
SEMI!!

User avatar
Johnnie
Posts: 512
Joined: Sat May 28, 2016 3:18 pm
Location: Michigan

Re: International stocks in free fall

Post by Johnnie » Tue Jun 19, 2018 6:13 pm

Been eyeing truck rental prices for a few weeks but - naah. :P

I am however fondly recalling a decision the day Brexit broke a bit more than two years ago to accelerate the next tranche of a DCA into internationals. I calculated later that this one little market timing decision made me literally - hundreds of dollars.
"I know nothing."

blackcat allie
Posts: 81
Joined: Wed Jan 24, 2018 11:54 pm

Re: International stocks in free fall

Post by blackcat allie » Fri Aug 10, 2018 1:33 pm

Thinking about this thread today...

ImmigrantSaver
Posts: 221
Joined: Tue Nov 22, 2016 6:24 pm

Re: International stocks in free fall

Post by ImmigrantSaver » Fri Aug 10, 2018 1:36 pm

blackcat allie wrote:
Fri Aug 10, 2018 1:33 pm
Thinking about this thread today...
While buying VTIAX? :twisted:

User avatar
vineviz
Posts: 2322
Joined: Tue May 15, 2018 1:55 pm

Re: International stocks in free fall

Post by vineviz » Fri Aug 10, 2018 1:45 pm

May be a good day for rebalancing?
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

User avatar
triceratop
Moderator
Posts: 5756
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: International stocks in free fall

Post by triceratop » Fri Aug 10, 2018 1:48 pm

I bought International stocks on Tuesday as part of my monthly contribution so I look pretty dumb now. However I can always sell more bonds and buy more if they keep selling off.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

lostdog
Posts: 1293
Joined: Thu Feb 04, 2016 2:15 pm

Re: International stocks in free fall

Post by lostdog » Fri Aug 10, 2018 1:49 pm

My automatic investment into Total World Index at Vanguard went through today. Lucky...

lostdog
Posts: 1293
Joined: Thu Feb 04, 2016 2:15 pm

Re: International stocks in free fall

Post by lostdog » Fri Aug 10, 2018 1:51 pm

It's interesting how such a small country that is maybe 1% of the world market cap creates a day of emotional selloff affecting the world markets.

Whakamole
Posts: 793
Joined: Wed Jan 13, 2016 9:59 pm

Re: International stocks in free fall

Post by Whakamole » Fri Aug 10, 2018 1:59 pm

vineviz wrote:
Fri Aug 10, 2018 1:45 pm
May be a good day for rebalancing?
Or tax loss harvesting... VFWAX is still the preferred TLH partner, correct?

User avatar
sleepysurf
Posts: 176
Joined: Sat Nov 23, 2013 6:59 am
Location: Florida

Re: International stocks in free fall

Post by sleepysurf » Fri Aug 10, 2018 2:40 pm

vineviz wrote:
Fri Aug 10, 2018 1:45 pm
May be a good day for rebalancing?
Thanks Turkey! Just pulled the rebalancing trigger!
Retired 2018 | ~50/45/5 (partially sliced and diced)

User avatar
ReformedSpender
Posts: 225
Joined: Fri Mar 16, 2018 1:24 pm
Location: Stone's Throw from Vanguard

Re: International stocks in free fall

Post by ReformedSpender » Fri Aug 10, 2018 2:45 pm

Turkey makes up a whopping 0.2% of VTIAX. Highly doubt you going to see a fire sale on share price

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

3funder
Posts: 787
Joined: Sun Oct 15, 2017 9:35 pm

Re: International stocks in free fall

Post by 3funder » Fri Aug 10, 2018 2:51 pm

ReformedSpender wrote:
Fri Aug 10, 2018 2:45 pm
Turkey makes up a whopping 0.2% of VTIAX. Highly doubt you going to see a fire sale on share price

:beer
I was considering buying a little more today, but then I realized what you just mentioned and decided to pass.

User avatar
pokebowl
Posts: 223
Joined: Sat Dec 17, 2016 7:22 pm
Location: The Orion Spur of the Milky Way galaxy.

Re: International stocks in free fall

Post by pokebowl » Fri Aug 10, 2018 3:03 pm

Suspicious (its not) why there are no posts to this thread in 2017. :twisted:
There is nothing more expensive than something offered for free.

User avatar
sleepysurf
Posts: 176
Joined: Sat Nov 23, 2013 6:59 am
Location: Florida

Re: International stocks in free fall

Post by sleepysurf » Fri Aug 10, 2018 3:08 pm

ReformedSpender wrote:
Fri Aug 10, 2018 2:45 pm
Turkey makes up a whopping 0.2% of VTIAX. Highly doubt you going to see a fire sale on share price
I'm thinking the market overreacted. VXUS was down ~1.9%, and I needed to rebalance into VTIAX anyways. Not really a "market timing" move for me.
Retired 2018 | ~50/45/5 (partially sliced and diced)

User avatar
oldzey
Posts: 1108
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

Re: International stocks in free fall

Post by oldzey » Fri Aug 10, 2018 3:29 pm

0% International works for me!

TGIF!

:sharebeer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

H-Town
Posts: 1309
Joined: Sun Feb 26, 2017 2:08 pm

Re: International stocks in free fall

Post by H-Town » Fri Aug 10, 2018 3:37 pm

pokebowl wrote:
Fri Aug 10, 2018 3:03 pm
Suspicious (its not) why there are no posts to this thread in 2017. :twisted:
because people were busy racking up money, that's why.

visualguy
Posts: 869
Joined: Thu Jan 30, 2014 1:32 am

Re: International stocks in free fall

Post by visualguy » Fri Aug 10, 2018 9:01 pm

oldzey wrote:
Fri Aug 10, 2018 3:29 pm
0% International works for me!

TGIF!

:sharebeer
+1

Ex-US performance has been hard to stomach for so many years now. Glad to be 0%.

telecaster
Posts: 33
Joined: Wed Mar 21, 2018 9:12 pm

Re: International stocks in free fall

Post by telecaster » Fri Aug 10, 2018 9:41 pm

I started a taxable account at the end of last year. Up to now it's been entirely fusvx. Today I plunked down my first buy of ftpix in that account. It's been growing in size and messing up my us vs international asset allocation and I've been wanting to move more to a 3 fund in taxable. Good day to start.

Next up is bonds. I know everyone recommends keeping these only in tax advantaged accounts but ... I do plan on withdrawing from my taxable to bridge me in retirement until I can withdraw from my 401k. This makes me think I should not be 100% equities in taxable.

Advice welcomed, but today felt like a good day to take the international plunge in this account.

Cheers!

User avatar
pokebowl
Posts: 223
Joined: Sat Dec 17, 2016 7:22 pm
Location: The Orion Spur of the Milky Way galaxy.

Re: International stocks in free fall

Post by pokebowl » Fri Aug 10, 2018 11:55 pm

telecaster wrote:
Fri Aug 10, 2018 9:41 pm
I started a taxable account at the end of last year. Up to now it's been entirely fusvx. Today I plunked down my first buy of ftpix in that account. It's been growing in size and messing up my us vs international asset allocation and I've been wanting to move more to a 3 fund in taxable. Good day to start.

Next up is bonds. I know everyone recommends keeping these only in tax advantaged accounts but ... I do plan on withdrawing from my taxable to bridge me in retirement until I can withdraw from my 401k. This makes me think I should not be 100% equities in taxable.

Advice welcomed, but today felt like a good day to take the international plunge in this account.

Cheers!
If the reason you are using FUSVX and FTPIX is because your brokerage is with Fidelity, I would recommend you use the ishares ETF equivalents instead: IVV and IXUS. The reason being is you will pay no commission on those trades through Fidelity, and unlike with FUSVX and FTPIX, the ishares ETFs will not distribute annual capital gains on to you. Otherwise FUSVX and FTPIX will generate more taxable events for you come tax time.
There is nothing more expensive than something offered for free.

User avatar
aj76er
Posts: 603
Joined: Tue Dec 01, 2015 11:34 pm
Location: Portland, OR

Re: International stocks in free fall

Post by aj76er » Sat Aug 11, 2018 1:38 am

telecaster wrote:
Fri Aug 10, 2018 9:41 pm
I started a taxable account at the end of last year. Up to now it's been entirely fusvx. Today I plunked down my first buy of ftpix in that account. It's been growing in size and messing up my us vs international asset allocation and I've been wanting to move more to a 3 fund in taxable. Good day to start.

Next up is bonds. I know everyone recommends keeping these only in tax advantaged accounts but ... I do plan on withdrawing from my taxable to bridge me in retirement until I can withdraw from my 401k. This makes me think I should not be 100% equities in taxable.

Advice welcomed, but today felt like a good day to take the international plunge in this account.

Cheers!
You don't need bonds in taxable account. When it comes time to sell, if your overall stock percentage is below target then simply sell bonds in tax-advantaged to buy more stocks. In this case, you've actually harvested from bonds indirectly (ie in a two-step process).

The only caveat is that you want a decent amount of stocks in your taxable account to last until you can withdraw from your tax advantaged accounts without penalty.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

telecaster
Posts: 33
Joined: Wed Mar 21, 2018 9:12 pm

Re: International stocks in free fall

Post by telecaster » Sun Aug 12, 2018 7:45 am

pokebowl wrote:
Fri Aug 10, 2018 11:55 pm
telecaster wrote:
Fri Aug 10, 2018 9:41 pm
I started a taxable account at the end of last year. Up to now it's been entirely fusvx. Today I plunked down my first buy of ftpix in that account. It's been growing in size and messing up my us vs international asset allocation and I've been wanting to move more to a 3 fund in taxable. Good day to start.

Next up is bonds. I know everyone recommends keeping these only in tax advantaged accounts but ... I do plan on withdrawing from my taxable to bridge me in retirement until I can withdraw from my 401k. This makes me think I should not be 100% equities in taxable.

Advice welcomed, but today felt like a good day to take the international plunge in this account.

Cheers!
If the reason you are using FUSVX and FTPIX is because your brokerage is with Fidelity, I would recommend you use the ishares ETF equivalents instead: IVV and IXUS. The reason being is you will pay no commission on those trades through Fidelity, and unlike with FUSVX and FTPIX, the ishares ETFs will not distribute annual capital gains on to you. Otherwise FUSVX and FTPIX will generate more taxable events for you come tax time.
Ah interesting. Can you guys help me understand this?

The expense ratios for the ETF's are higher:
.04 vs .015 for IVV vs FUSVX
.1 vs .06 for IXUS vs FTPIX

But the benefit would be less taxable events for capital gains? I suppose I'll pay taxes either way, but they will be higher if I take them now as income in a high tax bracket vs long term capital gains when I withdraw and sell in retirement?
I really have no feel for how the numbers crunch out. Is it worth switching funds for this?

Thanks for the education!

telecaster
Posts: 33
Joined: Wed Mar 21, 2018 9:12 pm

Re: International stocks in free fall

Post by telecaster » Sun Aug 12, 2018 7:49 am

aj76er wrote:
Sat Aug 11, 2018 1:38 am
telecaster wrote:
Fri Aug 10, 2018 9:41 pm
I started a taxable account at the end of last year. Up to now it's been entirely fusvx. Today I plunked down my first buy of ftpix in that account. It's been growing in size and messing up my us vs international asset allocation and I've been wanting to move more to a 3 fund in taxable. Good day to start.

Next up is bonds. I know everyone recommends keeping these only in tax advantaged accounts but ... I do plan on withdrawing from my taxable to bridge me in retirement until I can withdraw from my 401k. This makes me think I should not be 100% equities in taxable.

Advice welcomed, but today felt like a good day to take the international plunge in this account.

Cheers!
You don't need bonds in taxable account. When it comes time to sell, if your overall stock percentage is below target then simply sell bonds in tax-advantaged to buy more stocks. In this case, you've actually harvested from bonds indirectly (ie in a two-step process).

The only caveat is that you want a decent amount of stocks in your taxable account to last until you can withdraw from your tax advantaged accounts without penalty.
The way I'm viewing it, my taxable account is a stand-alone portfolio since I'll hopefully rely on it for about 10 years before I can touch and take anything out of my 401K. From that perspective I have viewed it as asset allocation risk management. If the market and equites plunge, I can't rebalance from bonds to stocks in my taxable etc. If I lumped all my accounts into a single view and long term then putting bonds only in the 401k makes perfect sense. But it feels like I'm taking an all in 100% equities risk in a portfolio that may have to stand on its own as a bridge to 59 years old for 10'ish years.

This may all be wishful thinking, and I'll end up working until I can withdraw from my 401k. But I'd like to at least plan for success at this point in case the numbers end up working out and I can spend some of my 50's with my family instead of at megacorp.

columbia
Posts: 1112
Joined: Tue Aug 27, 2013 5:30 am

Re: International stocks in free fall

Post by columbia » Sun Aug 12, 2018 7:53 am

patrick wrote:
Fri Jun 24, 2016 5:24 pm
Here is an interesting data point to consider:

On August 8, 2011, then infamous "U.S. stocks in freefall" thread began. Here is the result of that thread, from the point of view of an investor who placed a mutual fund traade when the thread appeared (thus receiving the end of day prices):

On June 24, 2016, a $100,000 investment in Vanguard Total Stock Market Index Admiral had grown to $199,645. Yes, that includes today's losses.
On June 24, 2016, the thread had grown to 3004 posts.

Now a similar thread has started for international. Should we expect this thread to have a similar outcome over the next 1782 days as the US thread had over its 1782 days so far? If so, then we should see the following:

On May 11, 2021, an investment in Vanguard Total International should be worth about twice what it is today.
On May 21, 2021, this thread will also have about three thousand posts.

Which is not to say that I actually believe in such market timing. I will be sticking with the asset allocation I had selected before.

It has a long way to go, in order almost double by May 11, 2021:

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D

User avatar
zaboomafoozarg
Posts: 1975
Joined: Sun Jun 12, 2011 12:34 pm

Re: International stocks in free fall

Post by zaboomafoozarg » Sun Aug 12, 2018 8:49 am

telecaster wrote:
Sun Aug 12, 2018 7:49 am
The way I'm viewing it, my taxable account is a stand-alone portfolio since I'll hopefully rely on it for about 10 years before I can touch and take anything out of my 401K.
I also view it that way because of planned usage in early retirement, and I use VWITX (Vanguard intermediate-term tax-exempt bonds) in my taxable account.

At Fidelity it doesn't look like they have any intermediate-term tax-exempt bond fund index ETFs that are fee-free, but they do have MUB (total muni bond market) and SUB (short-term muni bonds) available as fee-free options.

Or you can just use AGG and pay the taxes.

User avatar
ReformedSpender
Posts: 225
Joined: Fri Mar 16, 2018 1:24 pm
Location: Stone's Throw from Vanguard

Re: International stocks in free fall

Post by ReformedSpender » Mon Aug 13, 2018 8:38 pm

Vanguard total international stock index (admiral and investor shares) just half a percent away from 52 week lows after the close today

:shock:
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

livesoft
Posts: 62960
Joined: Thu Mar 01, 2007 8:00 pm

Re: International stocks in free fall

Post by livesoft » Mon Aug 13, 2018 8:53 pm

ReformedSpender wrote:
Mon Aug 13, 2018 8:38 pm
Vanguard total international stock index (admiral and investor shares) just half a percent away from 52 week lows after the close today

:shock:
There will soon be a bevy of TLH posts that will continue until the crescendo in late December.
Wiki This signature message sponsored by sscritic: Learn to fish.

stupidkid
Posts: 155
Joined: Wed Oct 12, 2011 7:11 pm

Re: International stocks in free fall

Post by stupidkid » Mon Aug 13, 2018 8:57 pm

I was thinking about tlh today!

User avatar
oldzey
Posts: 1108
Joined: Sun Apr 13, 2014 8:38 pm
Location: Land of Lincoln

Re: International stocks in free fall

Post by oldzey » Mon Aug 13, 2018 9:57 pm

ReformedSpender wrote:
Mon Aug 13, 2018 8:38 pm
Vanguard total international stock index (admiral and investor shares) just half a percent away from 52 week lows after the close today

:shock:
Well, at least they're on sale. :|
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

columbia
Posts: 1112
Joined: Tue Aug 27, 2013 5:30 am

Re: International stocks in free fall

Post by columbia » Mon Aug 13, 2018 10:00 pm

livesoft wrote:
Mon Aug 13, 2018 8:53 pm
ReformedSpender wrote:
Mon Aug 13, 2018 8:38 pm
Vanguard total international stock index (admiral and investor shares) just half a percent away from 52 week lows after the close today

:shock:
There will soon be a bevy of TLH posts that will continue until the crescendo in late December.
My suspicion is that these opportunities will persist in the coming years.

Post Reply