30 Years and 100% VTI

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Texanbybirth
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Re: 30 Years and 100% VTI

Post by Texanbybirth »

OP,

I would be perfectly comfortable leaving a 30-year investment in VTI and never checking it again.

I'd also feel perfectly comfortable contributing to Vanguard's Lifestrategy Growth fund (VASGX) for 30 years, which is actually what we are doing.

:beer
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
asif408
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Location: Florida

Re: 30 Years and 100% VTI

Post by asif408 »

Marseille07 wrote: Tue Apr 06, 2021 1:45 pm
jason2459 wrote: Tue Apr 06, 2021 1:41 pm
Marseille07 wrote: Tue Apr 06, 2021 1:36 pm
asif408 wrote: Tue Apr 06, 2021 1:28 pm
bck63 wrote: Fri Apr 02, 2021 8:22 pm

Because US has vastly outperformed ex-US over the last two centuries (despite small periods of ex-US out-performance here and there).
Can you provide some data on how small those periods of ex-US outperformance have been? One poster, for example, has noted a 50 year period or so of international outperformance from the late 1960s to early 2010s, is that what you consider small?
I don't know which dataset the poster was looking, but international outperformance ended around 1990 when Nikkei collapsed; and US was certainly outperforming during the dot-com boom. There's no way it lasted until early 2010s.
If someone started in 2000 ex-US would have outperformed in that time frame.
Correct. I was just saying it wasn't like 1960~2010. There are spots of international outperformance here and there, just not a half century.
It is certainly true that, for example, the EAFE index outperformance the US market in the 1970s, 1980s, and 2000s decades. So the possibility of outperformance between some point in the 1960s and early 2010s is not out of the realm of possibility. I don't want to put in the effort to find that information, but I figured since you had such a strong opinion you must be using actual data and can show that didn't happen.

In fact, our own Bogleheads wiki shows a 38 year period where US stocks were only a drag to a portfolio: https://www.bogleheads.org/wiki/File:US ... erging.png. Is this graph wrong? If so, it should be removed.
Last edited by asif408 on Tue Apr 06, 2021 2:41 pm, edited 1 time in total.
TheDDC
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Re: 30 Years and 100% VTI

Post by TheDDC »

If you truly would not make any changes at all, I would stick with VTI/VXUS 75/25. Stay away from fixed income or bonds.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks, minimize amount given to medical-industrial complex
Marseille07
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Re: 30 Years and 100% VTI

Post by Marseille07 »

asif408 wrote: Tue Apr 06, 2021 2:33 pm
Marseille07 wrote: Tue Apr 06, 2021 1:45 pm
jason2459 wrote: Tue Apr 06, 2021 1:41 pm
Marseille07 wrote: Tue Apr 06, 2021 1:36 pm
asif408 wrote: Tue Apr 06, 2021 1:28 pm
Can you provide some data on how small those periods of ex-US outperformance have been? One poster, for example, has noted a 50 year period or so of international outperformance from the late 1960s to early 2010s, is that what you consider small?
I don't know which dataset the poster was looking, but international outperformance ended around 1990 when Nikkei collapsed; and US was certainly outperforming during the dot-com boom. There's no way it lasted until early 2010s.
If someone started in 2000 ex-US would have outperformed in that time frame.
Correct. I was just saying it wasn't like 1960~2010. There are spots of international outperformance here and there, just not a half century.
It is certainly true that, for example, the EAFE index outperformance the US market in the 1970s, 1980s, and 2000s decades. So the possibility of outperformance between some point in the 1960s and early 2010s is not out of the realm of possibility. I don't want to put in the effort to find that information, but I figured since you had such a strong opinion you must be using actual data and can show that didn't happen.

In fact, our own Bogleheads wiki shows a 38 year period where US stocks were only a drag to a portfolio: https://www.bogleheads.org/wiki/File:US ... erging.png. Is this graph wrong? If so, it should be removed.
It's hard to judge if the graph is right or wrong, because having an AA of US & ex-US with rebalancing and measuring the CAGR / volatility of that, would carry a lot more implications than simply saying "US outperformed ex-US" or vice versa.
nigel_ht
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Re: 30 Years and 100% VTI

Post by nigel_ht »

000 wrote: Fri Apr 02, 2021 8:54 pm
bck63 wrote: Fri Apr 02, 2021 8:22 pm Because US has vastly outperformed ex-US over the last two centuries (despite small periods of ex-US out-performance here and there).
Do you expect another two world wars where every other major economy is crippled to occur in your lifetime? If not, that fact is meaningless.
The US us #3 in population and #3 in area. It is #2 in natural resources behind Russia.

It currently has a small but positive population growth rate.

We’re number 1 not just because of two world wars, for which Asia and Europe has recovered from but because we have abundant resources, a large but manageable population density, have culturally rewarded innovation and a form of government that is the worst except for all the others.

While China may overtake the US we won’t likely become 2nd tier unless we have a civil war or vote our way into hyperinflation somehow.

That China COULD eclipse the US is a distinct possibility but investing in China has higher systemic risk of the central government doing whatever it wants even if it crashes the stock market. Ex-US without China is...mostly uninteresting...
nigel_ht
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Re: 30 Years and 100% VTI

Post by nigel_ht »

TheTimeLord wrote: Fri Apr 02, 2021 3:21 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Honestly, to me it is an implausible proposition.
Why? The easy scenario is grandparents give each grandchild $10K at birth in a trust. Park it in Wellington or Target Date fund and ignore for 30 years (other than paying taxes and trustee fees) until the terms of the trust releases the final amount to the grandchild (aka 30 years).

If richer, park $100K or whatever in there (after taxes).

The rest can go to charity or whatever.
000
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Re: 30 Years and 100% VTI

Post by 000 »

nigel_ht wrote: Tue Apr 06, 2021 2:55 pm The US us #3 in population and #3 in area. It is #2 in natural resources behind Russia.

It currently has a small but positive population growth rate.

We’re number 1 not just because of two world wars, for which Asia and Europe has recovered from but because we have abundant resources, a large but manageable population density, have culturally rewarded innovation and a form of government that is the worst except for all the others.

While China may overtake the US we won’t likely become 2nd tier unless we have a civil war or vote our way into hyperinflation somehow.

That China COULD eclipse the US is a distinct possibility but investing in China has higher systemic risk of the central government doing whatever it wants even if it crashes the stock market. Ex-US without China is...mostly uninteresting...
Ever heard the phrase "priced in"?
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TheTimeLord
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Re: 30 Years and 100% VTI

Post by TheTimeLord »

nigel_ht wrote: Tue Apr 06, 2021 3:07 pm
TheTimeLord wrote: Fri Apr 02, 2021 3:21 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Honestly, to me it is an implausible proposition.
Why? The easy scenario is grandparents give each grandchild $10K at birth in a trust. Park it in Wellington or Target Date fund and ignore for 30 years (other than paying taxes and trustee fees) until the terms of the trust releases the final amount to the grandchild (aka 30 years).

If richer, park $100K or whatever in there (after taxes).

The rest can go to charity or whatever.
At the rate of change in the world it is implausible for me to pick a single set and forget investment or to even have a desire to.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
nigel_ht
Posts: 2013
Joined: Tue Jan 01, 2019 10:14 am

Re: 30 Years and 100% VTI

Post by nigel_ht »

TheTimeLord wrote: Tue Apr 06, 2021 3:47 pm
nigel_ht wrote: Tue Apr 06, 2021 3:07 pm
TheTimeLord wrote: Fri Apr 02, 2021 3:21 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Honestly, to me it is an implausible proposition.
Why? The easy scenario is grandparents give each grandchild $10K at birth in a trust. Park it in Wellington or Target Date fund and ignore for 30 years (other than paying taxes and trustee fees) until the terms of the trust releases the final amount to the grandchild (aka 30 years).

If richer, park $100K or whatever in there (after taxes).

The rest can go to charity or whatever.
At the rate of change in the world it is implausible for me to pick a single set and forget investment or to even have a desire to.
Well, presumably I’ll be dead sometime in that 30 year period. So it’s set and forget from my perspective.
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HanSolo
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Re: 30 Years and 100% VTI

Post by HanSolo »

nisiprius wrote: Tue Apr 06, 2021 2:01 pm
HanSolo wrote: Sun Apr 04, 2021 3:09 am
nisiprius wrote: Fri Apr 02, 2021 8:12 pm Why doesn't everyone take out human emotion?

1) Because it is not possible to take out human emotion.

2) Because if you do you take out human emotion, then it doesn't matter what your asset allocation is, because you will not experience either happiness or sadness, whatever the outcome.
If you mean the above are true for all persons, I'm not sure that's true, or at least I don't know how to confirm it.

For example, on the second point, while emotional outcomes may be all that matters to some, I'm not sure we can say that's true for all persons.
I agree that I was too categorical on the first point.

I think you misunderstood my second point. If you "take out human emotion," then you cannot experience happiness or sadness, or generally, you cannot care about the outcome. If you do not care about the outcome, then you do not care about your asset allocation.
If "you" means me (HanSolo), then there's the question who can speak for me.

Speaking for myself, there are things I have a preference over that have little or no emotional hold on me. Sometimes it's a choice, i.e., I may choose not to get my emotions involved in certain matters, even though a preference or objective still exists. I may be different from you (nisiprius), and I think that's OK and why different people may have different answers. I think that's reasonable.

I'm speaking only for myself (if I may), and I think that's what the OP was asking us to do. I don't claim to know what's true about others.
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unclescrooge
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Re: 30 Years and 100% VTI

Post by unclescrooge »

watchnerd wrote: Fri Apr 02, 2021 8:08 pm
anon_investor wrote: Fri Apr 02, 2021 8:06 pm

Why not a new crypto too while we are at it? :twisted:
#DODGYCOIN
SPACCOIN?
raisinsaregrapes
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Re: 30 Years and 100% VTI

Post by raisinsaregrapes »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.
If I was planning on starting withdraws in the 30th year I wouldn't want it to be during a major downturn with 100% in VTI. If I couldn't change my AA in the in-between time I would select an AA halfway between what I do now (80/20) and what I want when I'm 65(50/50?). My answer is 70/30.
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