Percentage of the vanguard int. stock Index

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thumpie7
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Percentage of the vanguard int. stock Index

Post by thumpie7 »

What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
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Re: Percentage of the vanguard int. stock Index

Post by radiowave »

Not sure how actionable this is, but we're 15% international as a percent of all equity.
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renegade06
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Re: Percentage of the vanguard int. stock Index

Post by renegade06 »

It is really a personal decision, and there are strong feelings on this topic if you search the forum. Some believe that you don’t need any international. I’m at 27%, but Vanguard is recommending about 40%... so it’s really up to you.
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arcticpineapplecorp.
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Re: Percentage of the vanguard int. stock Index

Post by arcticpineapplecorp. »

I'm at 30% in my Roth IRA and 40% in my 457b (use a target date fund there and 40% international is the default as it is with most target date retirement funds).

If you're comfortable with 10%, then it really doesn't matter what anyone else does.

Adding international has been shown to reduce volatility to a point. 10% reduces volatility a little. 30%-40% reduces volatility more:

Image

source: https://www.vanguard.com/pdf/ISGGEB.pdf

have you read the wiki regarding "Domestic/International":

https://www.bogleheads.org/wiki/Domestic/International

I would.

welcome to the group.
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Re: Percentage of the vanguard int. stock Index

Post by whodidntante »

If you just want 10% or 20%, that's more of a hobby than a substantial investment. So maybe just forget the whole thing.
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Re: Percentage of the vanguard int. stock Index

Post by rkhusky »

When International starts significantly out-performing US, will you be tempted to increase your Int’l allocation? If so, increase it now to a point where you won’t be tempted to chase performance later.
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Re: Percentage of the vanguard int. stock Index

Post by Johm221122 »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea

As a U.S. investor you'll see anywhere from 0% to 50% of equity in international. I hold 15% of equity in Total International and 10% in small cap International
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arcticpineapplecorp.
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Re: Percentage of the vanguard int. stock Index

Post by arcticpineapplecorp. »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
there is no way to know in advance which portion will be the best. You will only know that after the fact.

From 2000-2009 you would have done better owning any portion of international than just U.S.

you can always find a portfolio that did better than yours. Here's 150 of them:

https://www.whitecoatinvestor.com/150-p ... han-yours/

thing is we don't know which of these will be the best in the future.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Percentage of the vanguard int. stock Index

Post by bikechuck »

whodidntante wrote: Tue Nov 17, 2020 9:26 pm If you just want 10% or 20%, that's more of a hobby than a substantial investment. So maybe just forget the whole thing.
I disagree that 20% is "more of a hobby". It is substantial enough to allow one to benefit in periods when international performance exceeds U.S. and to provide a hedge against a decline in the U.S. dollar.
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Re: Percentage of the vanguard int. stock Index

Post by ivgrivchuck »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
42.6%
44% VTI | 36% VXUS | 10% I-bonds | 10% EE-bonds
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Re: Percentage of the vanguard int. stock Index

Post by whodidntante »

bikechuck wrote: Tue Nov 17, 2020 9:36 pm
whodidntante wrote: Tue Nov 17, 2020 9:26 pm If you just want 10% or 20%, that's more of a hobby than a substantial investment. So maybe just forget the whole thing.
I disagree that 20% is "more of a hobby". It is substantial enough to allow one to benefit in periods when international performance exceeds U.S. and to provide a hedge against a decline in the U.S. dollar.
1% in international would also do that. Let's not go crazy. :twisted:
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Re: Percentage of the vanguard int. stock Index

Post by theorist »

Some of my money is in a target date fund, and Vanguard controls the allocations. It is at 40% international stocks.

The $ I directly invest myself (not through target date, but through individual mutual funds or stock choices) are at about 1/3 international and 2/3 U.S. in stock allocation right now. This is about right for me — I don’t worry about it much when either has a bad day relative to the other.
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Re: Percentage of the vanguard int. stock Index

Post by Bama12 »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
Do what you are comfortable with not what someone else tells you to do, it's your money.

I put 10% in Vanguard Developed-VTMGX and 10% in Vanguard Emerging-VEMAX.
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Re: Percentage of the vanguard int. stock Index

Post by 3funder »

I am at 50%; however, most people do not feel comfortable. 1/3 of equities is probably fine. If you are going to hold international stocks, make sure that you hold a high enough proportion that it will actually make a difference. International stocks are riskier in a number of ways; however, valuations matter, and right now, valuations favor investing in international stocks.
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Re: Percentage of the vanguard int. stock Index

Post by Anon9001 »

Honestly it depends heavily how you can tolerate tracking error. Do you check your local index frequently and compare your international investments to that? If yes than 0% should be the amount to invest as you will get highly disappointed if it under-performs for next 5-10 years and then proceed to sell it. If no than I think you can a global market cap which should be 40ish for USA investors and 90-98% for Ex-US investors Equity.
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Re: Percentage of the vanguard int. stock Index

Post by Stinky »

Personal decision. With a wide range of results.

I’m at 30%.
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Re: Percentage of the vanguard int. stock Index

Post by Robot Monster »

Unsure if you know this, but Jack Bogle saw no reason to own foreign stocks. Doesn't recommend them to ordinary investors. Neither does Warren Buffett. That said, according to a 2017 article entitled, "A stubborn investing rule shared by Jack Bogle and Warren Buffett," U.S. investors hold, on average, 15 percent exposure to stocks outside the U.S.

"Bogle said himself at the summer event, 'I do think investors can make a legitimate choice; if they want to do non-U.S., they should do it.' He added that if an investor is determined to go overseas, he would recommend no more than a 20 percent allocation...Bogle said recently that if he were to invest internationally, it would be in emerging markets, but not more than 5 percent." link

Vanguard Wellington Fund currently holds an 8.7% allocation in international stocks.

Have you seen the Boglehead page about various portfolios? link
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Re: Percentage of the vanguard int. stock Index

Post by ruralavalon »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities", available as an archived pdf. Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). The diversification benefit has varied over time. (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

As shown by the graph posted by arcticpineapplecorp the volatility reduction has varied little in the 20-40% range, and in any event has been fairly small. So don't spend a lot of time agonizing about this.
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Re: Percentage of the vanguard int. stock Index

Post by asif408 »

That depends on its future return. If it outperforms then 100% is probably best. If not then 0% is probably best.
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Re: Percentage of the vanguard int. stock Index

Post by Valuethinker »

ruralavalon wrote: Wed Nov 18, 2020 3:49 pm
thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities", available as an archived pdf. Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). The diversification benefit has varied over time. (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

As shown by the graph posted by arcticpineapplecorp the volatility reduction has varied little in the 20-40% range, and in any event has been fairly small. So don't spend a lot of time agonizing about this.
Is there any way we can frame this, and put it at the start of any discussion about international equities (for US investors)?

It neatly and succinctly summarises a balanced view of what the evidence shows. It makes no appeals to market inefficiency. No "US is best" appeals. No "we are all headed for the sink and we need to move our investments to New Zealand" appeals. No "I have been to other countries and they are full of foreigners" appeals. I exaggerate for effect, but not by much. :? :?

Really, all an American investor has to do is read the above post and take a decision based on it.

Nisiprius also has an excellent post on why it doesn't matter whether you have 0% in international or not, and that should be read, too.
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Re: Percentage of the vanguard int. stock Index

Post by Vulcan »

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Re: Percentage of the vanguard int. stock Index

Post by Broken Man 1999 »

I have sold all our Vanguard Total Intl. Stock Index ETF (VXUS) and bought Vanguard FTSE Developed Market ETF(VEA).

Still at around 16% of equities. Though, I might be more inclined to return to 20%+ with the new investment. Less odious, sans China.

Might lose out on some growth, but I'm OK with that.

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Re: Percentage of the vanguard int. stock Index

Post by RyeBourbon »

I target 20% of equities w/ 70/30 AA
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Re: Percentage of the vanguard int. stock Index

Post by abuss368 »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
Vanguard recommends anywhere from 20% - 50%. The correct percentage is the one that you are comfortable with and can sleep well at night.
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Re: Percentage of the vanguard int. stock Index

Post by abuss368 »

Jack Bogle believed that the overseas revenue and earnings of the S&P 500 companies was enough international exposure.
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Re: Percentage of the vanguard int. stock Index

Post by drumboy256 »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
I have about 22% moving towards 30%. My AA is 58 USTM / 22 INTLTM / 20 Bonds. As for why, well, just because the US has rallied to all-time highs, its time for the rest of the world to join the party.
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Re: Percentage of the vanguard int. stock Index

Post by sschoe2 »

25% of stocks 22% of total investments.

I have my 401k in Vanguard Target 2045 which invests 40% of stocks in VXUS, but I have my rIRA in Vanguard Total US Stock Market so that dilutes it down to 25%.
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Re: Percentage of the vanguard int. stock Index

Post by iamblessed »

Vanguard target funds are at about 35% int. stock index. I use that as a guide.
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Re: Percentage of the vanguard int. stock Index

Post by Steelersfan »

abuss368 wrote: Thu Nov 19, 2020 8:58 pm Jack Bogle believed that the overseas revenue and earnings of the S&P 500 companies was enough international exposure.
I mostly agree with John, but I have 15% of my equity international.
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Re: Percentage of the vanguard int. stock Index

Post by wootwoot »

0% is good
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Re: Percentage of the vanguard int. stock Index

Post by UpperNwGuy »

Pick a number between 0% and 50% and stick with it. Asking for opinions here will get you nowhere because you will get a bunch of contradictory advice. If you want to read some of that contradictory advice, read some of the many many threads on this very topic.
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Re: Percentage of the vanguard int. stock Index

Post by Soon2BXProgrammer »

UpperNwGuy wrote: Sat Nov 21, 2020 7:09 pm Pick a number between 0% and 50% and stick with it. Asking for opinions here will get you nowhere because you will get a bunch of contradictory advice. If you want to read some of that contradictory advice, read some of the many many threads on this very topic.
OR. pick market weight. (and stick with it)
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Re: Percentage of the vanguard int. stock Index

Post by abuss368 »

UpperNwGuy wrote: Sat Nov 21, 2020 7:09 pm Pick a number between 0% and 50% and stick with it. Asking for opinions here will get you nowhere because you will get a bunch of contradictory advice. If you want to read some of that contradictory advice, read some of the many many threads on this very topic.
I agree and have always said the best advice is the one an investor can stay with over the long term AND sleep well at night.
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Re: Percentage of the vanguard int. stock Index

Post by abuss368 »

arcticpineapplecorp. wrote: Tue Nov 17, 2020 9:14 pm I'm at 30% in my Roth IRA and 40% in my 457b (use a target date fund there and 40% international is the default as it is with most target date retirement funds).

If you're comfortable with 10%, then it really doesn't matter what anyone else does.

Adding international has been shown to reduce volatility to a point. 10% reduces volatility a little. 30%-40% reduces volatility more:

Image

source: https://www.vanguard.com/pdf/ISGGEB.pdf

have you read the wiki regarding "Domestic/International":

https://www.bogleheads.org/wiki/Domestic/International

I would.

welcome to the group.
Appears the focus is always on the reduction of volatility. I would expect that in some respects as including Total International to a portfolio would increase diversification. The cumulative performance of Total International over the long term has been a challenge and is a whole different matter. However that is in the past an no one knows what the future holds!
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Re: Percentage of the vanguard int. stock Index

Post by kelway »

I find I like 60/40 ratios in investing. 60% domestic, 40% international. Within that, 60% large, 40% small... within that, 60% blend/growth, 40% value.
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Re: Percentage of the vanguard int. stock Index

Post by Taylor Larimore »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
Clea:

I suggest 20% international stocks for U.S. investors using The Three-Fund Portfolio. You can read my reasons here:

How Much International Stock? A Suggestion.

Best wishes.
Taylor
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Re: Percentage of the vanguard int. stock Index

Post by joetro29 »

Don’t forget about morningstar x ray. I find I have more international than just the vanguard index fund.
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Re: Percentage of the vanguard int. stock Index

Post by abuss368 »

Don’t forget the MOST important aspect: spend less than you make, build cash, always try to increase investment contributions, pay down / off debt, hold enough insurance, keep costs and taxes low, own total market index funds!

If that is not the focus or overlooked, nothing else matters, including how much in US vs. International.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Percentage of the vanguard int. stock Index

Post by whereskyle »

thumpie7 wrote: Tue Nov 17, 2020 9:05 pm What percentage of the Vanguard International Stock Index Fund in the equity portion of one’s portfolio is best?

I’m comfortable with 10%, but I noticed Vanguard and Taylor Larimore recommends 20%.

Clea
10% is basically meaningless. 20%, I would say, is the minimum if you want it to have a meaningful impact on your portfolio. I let it fluctuate between 20% and global market cap (i.e., my 401k is 80/20, and my personal retirement accounts are all global market cap.)
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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