international and bond index look like trash?
international and bond index look like trash?
If you got in when it started in 2011, you didn't make a dime until 2014. If you stuck it out for the long ride, you found yourself a looser at the beginning of 2017. If you were hard core and went the entire ride, you had your money in a recommended international stock fund for 11 years and lost money?
Am I reading this right? What am I missing?
The bond index is just as bad. There is no 10% average here, no matter how you slice it.
K.I.S.S.- Keep It Stupid Simple
Re: international and bond index look like trash?
Well, let's just start with:
total return
You are missing "total return".
Go look it up and then we'll move on from there.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Re: international and bond index look like trash?
Why do charts rarely show total return? Is the assumption most people are not reinvesting dividends?
Re: international and bond index look like trash?
I think NAV / price charts are the default.
You want total return, you have to input a start date and an end date into a thing that has the data capable of providing you with total return over that period. That's not an "at a glance for everyone" kind of thing.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Re: international and bond index look like trash?
It's actually worse than this, VXUS/VGTSX in real terms is back to January/February 2006 levels as per PV. Also note how close it is in real terms to its 1999 highs.
60% AVGE | 20 Year TIPS LMP | 5% Cash
Re: international and bond index look like trash?
Will you please let the person go figure out total return and come back before we start talking about real returns? I'm holding back on stuff too...
Order! We need order!
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Re: international and bond index look like trash?
Awww c'mon. At least give OP a website (like Morningstar).
May all your index funds gain +0.5% today.
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Re: international and bond index look like trash?
No, because the funds pay out dividends. You can buy more shares using your dividends money, but it doesn't remove the fact that the funds lost value for the amount of dividends paid out.
Re: international and bond index look like trash?
Currency exchange also play vital role in return.
Below is iShares STOXX600 ETF in EUR vs VGK(Vanguard Europe ETF) in USD.
17.5 Years: In EUR 140% return vs In USD 81% return
Below is iShares STOXX600 ETF in EUR vs VGK(Vanguard Europe ETF) in USD.
17.5 Years: In EUR 140% return vs In USD 81% return
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Re: international and bond index look like trash?
I think the default is share price because that is the amount you pay when you buy a stock ticket. It is a valid dimension for making the actual purchase.
Growth of $10,000 can also mislead because past performance is not a guarantee of future performance.
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Re: international and bond index look like trash?
Not sure why you are expecting 10% from a bond fund, but OK. As far as stocks, even though the US market has a 10% historical average, it has had long periods where you lost money. You did not lose money investing in either of these funds the last 10 years -> Vng total international return 4.02%, Vng total bond 1.16%.2ball wrote: ↑Wed Oct 05, 2022 10:57 pm If you got in when it started in 2011, you didn't make a dime until 2014. If you stuck it out for the long ride, you found yourself a looser at the beginning of 2017. If you were hard core and went the entire ride, you had your money in a recommended international stock fund for 11 years and lost money?
Am I reading this right? What am I missing?
The bond index is just as bad. There is no 10% average here, no matter how you slice it.
The impulse is to think that a diversified asset class that underperforms for long periods (even decades) is going to permanently perform that way is a WRONG one. This is why you diversify - today's winners (US Stocks) can be tomorrow's losers and vice versa.
Re: international and bond index look like trash?
That’s true, it’s just a little misleading for a long term investor wanting to look at past performance. Maybe charts should say “does not include reinvested dividends.”Marseille07 wrote: ↑Thu Oct 06, 2022 12:55 amNo, because the funds pay out dividends. You can buy more shares using your dividends money, but it doesn't remove the fact that the funds lost value for the amount of dividends paid out.
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Re: international and bond index look like trash?
Yeah, the default assumption should be that dividends aren't included.
I'm a long-term investor but I actually don't reinvest dividends, for I dislike fractional shares. I do assess my finances monthly and would manually re-invest as necessary.
Re: international and bond index look like trash?
Re: international and bond index look like trash?
Because the charts are a report of what is happening on the market. Those charts are not about your personal situation. Note that if you make contributions or withdrawals of any kind the whole concept of return becomes different.* It is true that since return is defined to include dividends then not reinvesting the dividends is a withdrawal. There are charts called "growth of $10,000" that reflect reinvested distributions. The tool Portfolio Visualizer displays return.
*If there are cash flows one computes internal rate of return or time weighted average return to allow for said cash flows.
Re: international and bond index look like trash?
That would be really confusing. Imagine looking at a stock chart that says the price is $1200 a share because it includes 40 years of dividends. And you go to sell it and you get $56.
Re: international and bond index look like trash?
An investor can keep a spreadsheet of what they own including dividends and distribution, contributions, and withdrawals and display the results any way they want. Note a missing point sometimes is that the value of a holding is the product of the number of shares times the price of a share, both of which have to be tabulated. Dividend reinvestment buys more shares and changes in NAV mean changing price of a share. Return is computed by tracking value so that both factors are included. Yes, this sounds like a dumb statement, but people do make mistakes in this.
Re: international and bond index look like trash?
I'm confused. Is the U.S. stock graph looking good in comparison?
Re: international and bond index look like trash?
I get what you all are saying. But it seems like the price charts were misleading to the OP, too.
Re: international and bond index look like trash?
The chart in the OP had several problems, eg. it showed price rather than total return, and restricted the analysis to the short period when an ETF share class of the international fund in question was available. Fix those and you get this (nb. totals in the box by the bottom-right are adjusted for the roughly 2.6% average CPI inflation over the period, which the values in the table on top are not):
However, this view of each asset in isolation, over a relatively short period (which necessarily has a number of macro idiosyncrasies) still has several flaws if the OP's goal is to evaluate the suitability of these assets to serve as part of a US-based investor's portfolio.
However, this view of each asset in isolation, over a relatively short period (which necessarily has a number of macro idiosyncrasies) still has several flaws if the OP's goal is to evaluate the suitability of these assets to serve as part of a US-based investor's portfolio.
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Re: international and bond index look like trash?
I can only guess, but here are my guesses.
1) The kind guess:
"Price" is the number you get in real time from the exchange.
"Total return" involves record-keeping of the total contribution of dividends over the time period shown.
Before the advent of computers it was probably not feasible to calculate and present total return, so price was established as the default.
2) The cynical guess:
The main audiences for these charts are short-term speculators who don't hold for long enough for dividends to matter much.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: international and bond index look like trash?
Not missing anything, you're just falling victim to a common investing mistake, recency bias. There have been similarly long periods where tbills outperformed equities.2ball wrote: ↑Wed Oct 05, 2022 10:57 pm If you got in when it started in 2011, you didn't make a dime until 2014. If you stuck it out for the long ride, you found yourself a looser at the beginning of 2017. If you were hard core and went the entire ride, you had your money in a recommended international stock fund for 11 years and lost money?
Am I reading this right? What am I missing?
The bond index is just as bad. There is no 10% average here, no matter how you slice it.
Re: international and bond index look like trash?
nisiprius wrote: ↑Thu Oct 06, 2022 12:13 pmI can only guess, but here are my guesses.
1) The kind guess:
"Price" is the number you get in real time from the exchange.
"Total return" involves record-keeping of the total contribution of dividends over the time period shown.
I agree. But there is also the fact that what is done with the dividends is at the option of the individual. If they are reinvested then you get return, but if they are not reinvested there is a cash flow and return needs a different definition.
I think the biggest reason is the naive one that price is the number you get from the exchange and no one is trying to do more than that with it. The contrast to that is that fund companies have rules relating to reporting fund performance as return rather than price.
Before the advent of computers it was probably not feasible to calculate and present total return, so price was established as the default.
2) The cynical guess:
The main audiences for these charts are short-term speculators who don't hold for long enough for dividends to matter much.
Probably true. I don't think you ever see fundamental analysis applied to a return chart.
Re: international and bond index look like trash?
Thanks for all of the info. I have a lot to learn, I didn't know there were dividends.
So lets jump back.
the ETF's VOO and VTI and BND pay dividends?
Do Mutual funds Index funds pay dividends? VFIAX, VTSAX, VBTLX?
In my specific situation I am rolling over a government 457 and 401. pre tax money. I've been told I can never add money to these specific accounts. Is getting dividends and reinvesting them adding money?
So lets jump back.
the ETF's VOO and VTI and BND pay dividends?
Do Mutual funds Index funds pay dividends? VFIAX, VTSAX, VBTLX?
In my specific situation I am rolling over a government 457 and 401. pre tax money. I've been told I can never add money to these specific accounts. Is getting dividends and reinvesting them adding money?
K.I.S.S.- Keep It Stupid Simple
Re: international and bond index look like trash?
Yes, they all pay dividends. See here: https://investor.vanguard.com/investmen ... file/vtsax and scroll down to "distributions."2ball wrote: ↑Fri Oct 07, 2022 10:06 am Thanks for all of the info. I have a lot to learn, I didn't know there were dividends.
So lets jump back.
the ETF's VOO and VTI and BND pay dividends?
Do Mutual funds Index funds pay dividends? VFIAX, VTSAX, VBTLX?
In my specific situation I am rolling over a government 457 and 401. pre tax money. I've been told I can never add money to these specific accounts. Is getting dividends and reinvesting them adding money?
Reinvesting dividends is not adding money.