VTSAX or VTWAX over the next 35 years?

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guyesmith
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VTSAX or VTWAX over the next 35 years?

Post by guyesmith » Wed May 15, 2019 10:05 am

VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?

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vineviz
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Re: VTSAX or VTWAX over the next 35 years?

Post by vineviz » Wed May 15, 2019 10:08 am

VTWAX obviously.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

WhiteMaxima
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Re: VTSAX or VTWAX over the next 35 years?

Post by WhiteMaxima » Wed May 15, 2019 11:01 am

WAX all the way.

jibantik
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Re: VTSAX or VTWAX over the next 35 years?

Post by jibantik » Wed May 15, 2019 11:06 am

VTWAX of course.

If you went VTSAX you would be asserting that you can predict how thousands of companies all around the world will perform decades into the future. The fact that you are asking means you cannot predict that. Another reason I know that you cannot predict such a thing is because no one can :D.

anil686
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Re: VTSAX or VTWAX over the next 35 years?

Post by anil686 » Wed May 15, 2019 11:09 am

Yep VTWAX as well. Once the ER came down with the Admiral share levels - I have stopped splitting VTSAX and VTIAX and just use VTWAX...

lostdog
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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Wed May 15, 2019 11:11 am

VTWAX. It has 8032 stocks vs 3500 (VTSAX).

Don't be swayed by american exceptionalism, politics, past performance, ideologies, american nationalism, make believe crystal balls that can see into the future and many more weak arguments... Don't fall into this trap touted by some on this forum. Good luck with your choice.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

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Re: VTSAX or VTWAX over the next 35 years?

Post by Trader Joe » Wed May 15, 2019 11:17 am

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).

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femur
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Re: VTSAX or VTWAX over the next 35 years?

Post by femur » Wed May 15, 2019 11:20 am

VTWAX

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Re: VTSAX or VTWAX over the next 35 years?

Post by pokebowl » Wed May 15, 2019 11:22 am

I'd go with total world, VTWAX/VT.
Nullius in verba.

TropikThunder
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Re: VTSAX or VTWAX over the next 35 years?

Post by TropikThunder » Wed May 15, 2019 11:27 am

Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.

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TheTimeLord
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Re: VTSAX or VTWAX over the next 35 years?

Post by TheTimeLord » Wed May 15, 2019 11:34 am

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
Unless you talking about a Taxable Account I don't understand the question.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

cj2018
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Re: VTSAX or VTWAX over the next 35 years?

Post by cj2018 » Wed May 15, 2019 11:45 am

TropikThunder wrote:
Wed May 15, 2019 11:27 am
Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.
Neither VSTAX nor VTWAX, obviously.

VTTUX (Vanguard Total Universe Admiral) is what I bet all my networth on in the next 35 years.

And before you ask, yes I’m 100% positive such fund that covers every company in the Universe will be offered by Vanguard in the near future since Earth shall fall and we will all move to Mars :)

I hope you get my sarcasm lol

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TheTimeLord
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Re: VTSAX or VTWAX over the next 35 years?

Post by TheTimeLord » Wed May 15, 2019 11:49 am

TropikThunder wrote:
Wed May 15, 2019 11:27 am
Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.
Then wouldn't you want VTIAX (Vanguard Total International Stock Index Fund Admiral Shares)
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

donaldfair71
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Re: VTSAX or VTWAX over the next 35 years?

Post by donaldfair71 » Wed May 15, 2019 11:53 am

TheTimeLord wrote:
Wed May 15, 2019 11:49 am
TropikThunder wrote:
Wed May 15, 2019 11:27 am
Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.
Then wouldn't you want VTIAX (Vanguard Total International Stock Index Fund Admiral Shares)
But a Roman surely didn't want to be 100% in RVTSAX either! :happy

Nowizard
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Re: VTSAX or VTWAX over the next 35 years?

Post by Nowizard » Wed May 15, 2019 11:59 am

Would the same hold if the time frame were 10 years rather than 35? Why VTWAX other than broader coverage? Many choose 500 Index over Total Stock (If there is a rough analogy here).

Tim

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TheTimeLord
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Re: VTSAX or VTWAX over the next 35 years?

Post by TheTimeLord » Wed May 15, 2019 12:02 pm

donaldfair71 wrote:
Wed May 15, 2019 11:53 am
TheTimeLord wrote:
Wed May 15, 2019 11:49 am
TropikThunder wrote:
Wed May 15, 2019 11:27 am
Trader Joe wrote:
Wed May 15, 2019 11:17 am
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
This is an easy question to answer. Either VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares) or VFIAX (Vanguard 500 Index Fund Admiral Shares).
See: Rome, Empire, Fall of.
Then wouldn't you want VTIAX (Vanguard Total International Stock Index Fund Admiral Shares)
But a Roman surely didn't want to be 100% in RVTSAX either! :happy
You are correct. I just have trouble with the concept saying I am going choose between 1 of 2 options and I won't change that selection for 35 years. I just think so much will change over the next 35 years that the best choice might not even exist yet. That said push come to shove and taking the question literally I would pick VTWAX even though I am almost 100% U.S. today.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Prahasaurus
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Re: VTSAX or VTWAX over the next 35 years?

Post by Prahasaurus » Wed May 15, 2019 12:14 pm

I agree VTWAX is the way to go, especially if you want to follow a purer Bogleheads strategy. The 3-fund portfolio should really now be the 2-fund portfolio: VTWAX (total world stocks) and VBTLX (total US bonds), for US investors.

I also agree that replacing VTWAX with a combination of stock indices, e.g. VTSAX (US) and VTIAX (International) in some combination (80-20, 60-40, etc.), is placing bets. But having said that, so what? There is nothing wrong with placing bets. If you strongly believe the US will outperform the rest of the world over the next 35 years, then by all means go for it.

I only use VTWAX in my taxable portfolio, along with VBTLX and VWIUX (Muni Bonds). I like that approach. It seems to be less stress for me. Tax wise I do better with municipal bonds, but I like having a bit of diversification with VBTLX. So in the end, I have a 3 fund portfolio. But only 1 fund for stocks: VTWAX.

Having said that, I also invest in individual stocks in my Roth IRA, so I do place bets.

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Re: VTSAX or VTWAX over the next 35 years?

Post by 3funder » Wed May 15, 2019 12:15 pm

The latter.

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Re: VTSAX or VTWAX over the next 35 years?

Post by HawkeyePierce » Wed May 15, 2019 12:48 pm

In my mind, the best argument for Total World over Total US is the tendency of markets to revert to the mean.

We've been living in the echoes of World War II for the last seventy years—a war that left America as the only industrialized country standing, allowing us to write the rules of the global economy. (I highly recommend The Battle of Bretton Woods by Benn Steil on how America wrote those rules).

If markets revert to the mean, we should reasonably expect the rest of the world to expand more rapidly than the US. Note that I am not making an argument that they will take parts of the pie away from the US—I am arguing the pie will grow, with most of that growth occurring ex-US.

Image

Leaving aside predictions of the future, consider this: if you own Total World and the US markets outpace ex-US markets, you'll catch that upside since at the moment, VTWAX is about 50% US equities. If ex-US grows faster, you'll catch that upside too. Either way you win. The same isn't true of a strategy that overweights the US—you only win if the US equity market returns meet your needs.

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Re: VTSAX or VTWAX over the next 35 years?

Post by pkcrafter » Wed May 15, 2019 1:00 pm

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
Neither. I would suggest ~25-35% total international and the rest in VTSAX. Also some bonds to create a fully diversified portfolio.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Re: VTSAX or VTWAX over the next 35 years?

Post by MotoTrojan » Wed May 15, 2019 1:05 pm

pkcrafter wrote:
Wed May 15, 2019 1:00 pm
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
Neither. I would suggest ~25-35% total international and the rest in VTSAX. Also some bonds to create a fully diversified portfolio.

Paul
This is me. If anything, I want to be split between the two extremes. I fully buy in to the merit of true market cap investing, but I don't want to feel left out if the 100% US crowd wins. I do hold 20% of equities in US Small Value though, so my market cap equity funds are close to VTWAX exposure, plus some small-value which is harder to hold Internationally.

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bligh
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Re: VTSAX or VTWAX over the next 35 years?

Post by bligh » Wed May 15, 2019 1:08 pm

+1 for VTWAX.

Will it outperform VTSAX? Not sure. Maybe it will, maybe it wont.. But the REIT fund or Health care fund or Technology fund or utilities fund.. could outperform either VTWAX or VTSAX (or both). You cannot predict the performance out 35 years from now.

Just like you are not picking companies, states, or sectors/industries.. you shouldn't try to pick countries. Own the haystack. Though, for the same reason, I would also recommend owning some bonds. :D

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FIREchief
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Re: VTSAX or VTWAX over the next 35 years?

Post by FIREchief » Wed May 15, 2019 1:14 pm

Total US for me.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Taylor Larimore
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Re: VTSAX or VTWAX over the next 35 years?

Post by Taylor Larimore » Wed May 15, 2019 1:28 pm

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
guyesmith:

I have considered simplifying The Three Fund Portfolio to a Two Fund Portfolio (Total World + Total Bond Market). However, keeping Total U.S. Stock Market and Total International Stock Market separate has several advantages:

Lower (combined) Expense Ratios (Admiral Shares): Total Stock Market (VTSAX) = 0.04%; Total International (VTIAX) = 0.11%; Total World (VTWAX) = 0.10%.

Lower Turnover (hidden costs): Total Stock Market = 3.4%; Total International = 3.4%; Total World Admiral 8.9%.

Better diversification (lower risk): Total U.S. Stock Market and Total International (combined) hold 9,900 stocks. Total World holds 8,125.

Flexibility: The best allocation between U.S. Total Stock Market and Total International is very controversial. Separate stock funds allow investors to choose their desired allocation.

Note: Figures are from February.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Wed May 15, 2019 1:39 pm

Taylor Larimore wrote:
Wed May 15, 2019 1:28 pm
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
guyesmith:

I have considered simplifying The Three Fund Portfolio to a Two Fund Portfolio (Total World + Total Bond Market). However, keeping Total U.S. Stock Market and Total International Stock Market separate has several advantages:

Lower (combined) Expense Ratios (Admiral Shares): Total Stock Market (VTSAX) = 0.04%; Total International (VTIAX) = 0.11%; Total World (VTWAX) = 0.10%.

Lower Turnover (hidden costs): Total Stock Market = 3.4%; Total International = 3.4%; Total World Admiral 8.9%.

Better diversification (lower risk): Total U.S. Stock Market and Total International (combined) hold 9,900 stocks. Total World holds 8,125.

Flexibility: The best allocation between U.S. Total Stock Market and Total International is very controversial. Separate stock funds allow investors to choose their desired allocation.

Note: Figures are from February.

Best wishes.
Taylor

Negligible.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

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Re: VTSAX or VTWAX over the next 35 years?

Post by HawkeyePierce » Wed May 15, 2019 1:41 pm

Does anyone know why VTWAX would have higher turnover? Superficially I would've expected the opposite.

wolf359
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Re: VTSAX or VTWAX over the next 35 years?

Post by wolf359 » Wed May 15, 2019 1:45 pm

Why did the little voice in my head just say,

"WAX on, SAX off?"

Personally, I use VTSAX and VTIAX. I'm just used to the way it works.

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Re: VTSAX or VTWAX over the next 35 years?

Post by Silence Dogood » Wed May 15, 2019 7:27 pm

What about bonds?

I invest in a Vanguard Target Retirement fund.

It owns more stocks than VTWAX and also includes both domestic and international bonds.

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Re: VTSAX or VTWAX over the next 35 years?

Post by Silence Dogood » Wed May 15, 2019 7:30 pm

HawkeyePierce wrote:
Wed May 15, 2019 1:41 pm
Does anyone know why VTWAX would have higher turnover? Superficially I would've expected the opposite.
I have no idea, but it's definitely interesting. 8.9% seems a bit high for an index fund.

I'm also not sure why 1,775 U.S. small cap stocks are left out of VTWAX.

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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Wed May 15, 2019 8:11 pm

Silence Dogood wrote:
Wed May 15, 2019 7:30 pm
HawkeyePierce wrote:
Wed May 15, 2019 1:41 pm
Does anyone know why VTWAX would have higher turnover? Superficially I would've expected the opposite.
I have no idea, but it's definitely interesting. 8.9% seems a bit high for an index fund.

I'm also not sure why 1,775 U.S. small cap stocks are left out of VTWAX.
Likely that these 1775 stocks represent less than 2% of the investable market cap, making a negligible difference in tracking the index but not a negligible in operating costs. This is my general understanding at least.
VTWAX and chill

bogledogle87
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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Wed May 15, 2019 8:16 pm

HawkeyePierce wrote:
Wed May 15, 2019 1:41 pm
Does anyone know why VTWAX would have higher turnover? Superficially I would've expected the opposite.
I wonder this as well. Doesn’t seem to line up since it tracks well to VTSAX + VTIAX st market weights. Qualified dividends are also roughly right in the middle of those two funds as well, so the turnover rate did not seem to be a problem. I did notice that the Total World Fund has increased from 5,000 stocks to over 8,000 over the last several years. I wonder if the fund increasing the number Of stocks to be more “complete” has anything to do with the way the turnover rate is reported.
VTWAX and chill

thefirst100k
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Re: VTSAX or VTWAX over the next 35 years?

Post by thefirst100k » Wed May 15, 2019 8:33 pm

Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.

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Re: VTSAX or VTWAX over the next 35 years?

Post by Taylor Larimore » Wed May 15, 2019 8:51 pm

thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
thefirst100k:

Jack Bogle wrote the Forward in my latest book, The Bogleheads' Guide To The Three-Fund Portfolio. This is a portion of what he wrote:
In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. -- Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%.
Sometimes old advice is the best advice. :wink:

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: VTSAX or VTWAX over the next 35 years?

Post by cj2018 » Wed May 15, 2019 9:04 pm

I always wonder this question - do they non-US investors have equal access to US funds as US investors with regards to non-US funds?

The debate between US/International seems largely only applicable to US investors since we are being offered the chance and products of international funds, and not vice versa?

Genuinely curious if say investors in China or in other major non-US markets have equal access to US funds as we do to international funds, how the demand and supply would work there? Put it in another word, are most non-US investors totally screwed from an allocation perspective if they don’t have at least invest half of their money in US? When in fact I bet they are even more heavily tilted towards their own home markets?

Hypothetical Example: a wealthy family from Singapore, from a global market cap perspective, should invest over 90%+ of its wealth in non-Singapore equities. In fact, they should really invest over 50% of its equities exposure to one single country called US. Would it make sense from this Singapore family’s perspective.
Last edited by cj2018 on Wed May 15, 2019 9:13 pm, edited 1 time in total.

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Re: VTSAX or VTWAX over the next 35 years?

Post by oldzey » Wed May 15, 2019 9:10 pm

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
In 2054, we'll know the answer.

In the meantime...

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

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Re: VTSAX or VTWAX over the next 35 years?

Post by vineviz » Wed May 15, 2019 9:14 pm

Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm

Sometimes old advice is the best advice.
More often, though, it is archaic and obsolete.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: VTSAX or VTWAX over the next 35 years?

Post by oldzey » Wed May 15, 2019 9:45 pm

Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm
thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
thefirst100k:

Jack Bogle wrote the Forward in my latest book, The Bogleheads' Guide To The Three-Fund Portfolio. This is a portion of what he wrote:
In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. -- Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%.
Sometimes old advice is the best advice. :wink:

Best wishes.
Taylor
The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 5/14/2019, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $66,468 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $27,493 in your Total International Stock Index Fund.

Looks like Jack was right. :wink:

Of course, past performance does not indicate future performance.

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

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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Thu May 16, 2019 6:20 am

vineviz wrote:
Wed May 15, 2019 9:14 pm
Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm

Sometimes old advice is the best advice.
More often, though, it is archaic and obsolete.
+1. Is not this the very definition of performance chasing? Also, what is a reasonable expectation for continued US outperformance just because it has since 1994? 10 more years? 50 Years? 1000 Years? You get my point.
VTWAX and chill

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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Thu May 16, 2019 6:27 am

thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
I think the era distinction is very important here. We all have great respect for Bogle and what he did for investors during his lifetime, but many of us have investment horizons that exceed 50 years after his passing. The world will change and evolve in ways he could have never could have imagined.

In my mind, it is not prudent for an investor to stick with a single country bet for eternity just because a highly-influential person preached it for so long (and granted, was proven correct) during his time on earth. Who can say his advice will always be true, especially many decades after his passing?
VTWAX and chill

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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Thu May 16, 2019 6:35 am

HawkeyePierce wrote:
Wed May 15, 2019 12:48 pm
If you own Total World and the US markets outpace ex-US markets, you'll catch that upside since at the moment, VTWAX is about 50% US equities. If ex-US grows faster, you'll catch that upside too. Either way you win. The same isn't true of a strategy that overweights the US—you only win if the US equity market returns meet your needs.
+1 This right here. This is exactly why I am 100% Total World. Especially with the US over 55% right now, VTWAX was such an easy call for me as soon as it was introduced at the 0.10% ER. It is the most diversified and unbiased stock portfolio you could own in the convenience of a single low-cost fund. What more could a passive investor want?

We must at least acknowledge that single country bets are the same logic applied to a different degree as Sector, Size, and Valuation overweight bets.
VTWAX and chill

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Re: VTSAX or VTWAX over the next 35 years?

Post by McDougal » Thu May 16, 2019 6:50 am

You are correct. I just have trouble with the concept saying I am going choose between 1 of 2 options and I won't change that selection for 35 years. I just think so much will change over the next 35 years that the best choice might not even exist yet. That said push come to shove and taking the question literally I would pick VTWAX even though I am almost 100% U.S. today.
[/quote]
Exactly this. All of our tightly held answers today could change tomorrow.

lostdog
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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Thu May 16, 2019 10:32 am

oldzey wrote:
Wed May 15, 2019 9:10 pm
guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
In 2054, we'll know the answer.

In the meantime...

Image
Out of date advice. Actually really bad advice.

VTWAX and chill.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

lostdog
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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Thu May 16, 2019 10:36 am

oldzey wrote:
Wed May 15, 2019 9:45 pm
Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm
thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
thefirst100k:

Jack Bogle wrote the Forward in my latest book, The Bogleheads' Guide To The Three-Fund Portfolio. This is a portion of what he wrote:
In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. -- Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%.
Sometimes old advice is the best advice. :wink:

Best wishes.
Taylor
The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 5/14/2019, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $66,468 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $27,493 in your Total International Stock Index Fund.

Looks like Jack was right. :wink:

Of course, past performance does not indicate future performance.

Image
Most investors don't invest looking in the rear view mirror. Good luck.
Last edited by lostdog on Thu May 16, 2019 10:43 am, edited 1 time in total.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

lostdog
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Re: VTSAX or VTWAX over the next 35 years?

Post by lostdog » Thu May 16, 2019 10:40 am

bogledogle87 wrote:
Thu May 16, 2019 6:20 am
vineviz wrote:
Wed May 15, 2019 9:14 pm
Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm

Sometimes old advice is the best advice.
More often, though, it is archaic and obsolete.
+1. Is not this the very definition of performance chasing? Also, what is a reasonable expectation for continued US outperformance just because it has since 1994? 10 more years? 50 Years? 1000 Years? You get my point.
+2

Young investors need to see how bad this advice is. Especially from one of the forum leaders. Home bias is not the way to invest properly. Thank you Vanguard and other institutions for providing advice and tools to see past this bad advice.

It's a matter of time before Vanguard replaces total stock and total international with total world in their life strategy and target date funds.
I don't invest looking in the rear view mirror and I know absolutely nothing about the future. I invest in Vanguard Total World Stock Index.

RJC
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Re: VTSAX or VTWAX over the next 35 years?

Post by RJC » Thu May 16, 2019 10:49 am

I started out with the SP500 because that is what I knew at the time (and what was only offered in some of my accounts). When I opened up a taxable account, this board helped in deciding to go with a total stock market fund. I have yet to be convinced that having a large international allocation is the way to go especially with the additional risks involved. It doesn't help that it's been lagging since the 90's either.

I think from a practical point of view, it just doesn't make sense for some people.
Last edited by RJC on Thu May 16, 2019 10:58 am, edited 1 time in total.

Trader Joe
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Re: VTSAX or VTWAX over the next 35 years?

Post by Trader Joe » Thu May 16, 2019 10:57 am

Taylor Larimore wrote:
Wed May 15, 2019 8:51 pm
thefirst100k wrote:
Wed May 15, 2019 8:33 pm
Just a reminder that Jack Bogle did not see the point of investing in international stocks. But then again he was from another era.
thefirst100k:

Jack Bogle wrote the Forward in my latest book, The Bogleheads' Guide To The Three-Fund Portfolio. This is a portion of what he wrote:
In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. -- Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%.
Sometimes old advice is the best advice. :wink:

Best wishes.
Taylor
Thank you Taylor!

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ruralavalon
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Location: Illinois

Re: VTSAX or VTWAX over the next 35 years?

Post by ruralavalon » Thu May 16, 2019 11:21 am

guyesmith wrote:
Wed May 15, 2019 10:05 am
VTSAX or VTWAX over the next 35 years?

That's Vanguard Total Stock Market Index Fund or the Vanguard Total World Stock Index Fund.

What do you think?
I don't know, I have no crystal ball, time machine or Ouija board.

Nobody knows, anyone claiming to know is fooling themselves.

Predictions of future events or conditions are not statements of fact, they are opinions.
Last edited by ruralavalon on Thu May 16, 2019 11:30 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

jibantik
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Re: VTSAX or VTWAX over the next 35 years?

Post by jibantik » Thu May 16, 2019 11:25 am

oldzey wrote:
Wed May 15, 2019 9:45 pm

The inception date of Vanguard Total Stock U.S. Stock Market Index Fund (VTSMX) was 4/27/1992.

The inception date of Vanguard Total International Stock Index Fund (VGTSX) was 4/29/1996.

Per Morningstar, as of 5/14/2019, if you had invested $10,000 in both funds on 4/29/1996, you would currently have $66,468 in your Total Stock U.S. Stock Market Index Fund, which would be more than double as much as the $27,493 in your Total International Stock Index Fund.

Looks like Jack was right. :wink:

Of course, past performance does not indicate future performance.

Image

And if you would have invested in AAPL you would have done even better! So, should we all invest our retirement in AAPL because people who invested in AAPL were "right"? Let's try not confuse outcome with strategy.

Image

lostdog wrote:
Thu May 16, 2019 10:40 am
bogledogle87 wrote:
Thu May 16, 2019 6:20 am
+1. Is not this the very definition of performance chasing? Also, what is a reasonable expectation for continued US outperformance just because it has since 1994? 10 more years? 50 Years? 1000 Years? You get my point.
+2

Young investors need to see how bad this advice is. Especially from one of the forum leaders. Home bias is not the way to invest properly. Thank you Vanguard and other institutions for providing advice and tools to see past this bad advice.

It's a matter of time before Vanguard replaces total stock and total international with total world in their life strategy and target date funds.
+3. It's not only home bias, it's performance chasing. Why are bogleheads trying to justify fund selection based on past performance :confused? Here is a good list of quotes about the follies of performance chasing.

bogledogle87
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Re: VTSAX or VTWAX over the next 35 years?

Post by bogledogle87 » Thu May 16, 2019 1:35 pm

RJC wrote:
Thu May 16, 2019 10:49 am
I have yet to be convinced that having a large international allocation is the way to go especially with the additional risks involved. It doesn't help that it's been lagging since the 90's either.
Have you considered that recent US dominance might not be confirmation that it will continue on the same path forever, but rather it may be a statistical outlier? It is very possible that US can have good fundamentals, strong currency, favorable regulations, and also be highly priced at the same time. This perfect storm may not always be the case for your investment horizon. In light of this, I might argue that a US-only portfolio is much riskier than a global portfolio or what the past performance charts may imply. After all, we are not immune to another 1989.

I have posted this on other threads as well, but it represents my perspective fairly well:

Unless an investor feels confident they could have predicted any portion of this graph, or can extrapolate it in a meaningful way going forward, Total World should at least be strongly considered as a reasonable starting point. For many of us, it is the ending point as well.

1900-2017 via Credit Suisse
Image
VTWAX and chill

RJC
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Re: VTSAX or VTWAX over the next 35 years?

Post by RJC » Thu May 16, 2019 2:33 pm

bogledogle87 wrote:
Thu May 16, 2019 1:35 pm
RJC wrote:
Thu May 16, 2019 10:49 am
I have yet to be convinced that having a large international allocation is the way to go especially with the additional risks involved. It doesn't help that it's been lagging since the 90's either.
Have you considered that recent US dominance might not be confirmation that it will continue on the same path forever, but rather it may be a statistical outlier? It is very possible that US can have good fundamentals, strong currency, favorable regulations, and also be highly priced at the same time. This perfect storm may not always be the case for your investment horizon. In light of this, I might argue that a US-only portfolio is much riskier than a global portfolio or what the past performance charts may imply. After all, we are not immune to another 1989.

I have posted this on other threads as well, but it represents my perspective fairly well:

Unless an investor feels confident they could have predicted any portion of this graph, or can extrapolate it in a meaningful way going forward, Total World should at least be strongly considered as a reasonable starting point. For many of us, it is the ending point as well.

1900-2017 via Credit Suisse
Image
I am familiar with that graph and do understand there may be slightly more risk by keeping all US equities in the next 10-20 years. But it's still not enough for me to increase my international allocation to a significant amount (20-50%).

I believe we continue to dispute international allocation because there really isn't a big difference. Some of the language here is quite harsh for those sticking with a mostly US portfolio. It's the amount we save and bond allocation that will have more impact in the long run IMO.

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