Why does anyone invest in international funds?

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keelerjr12
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Re: Why does anyone invest in international funds?

Post by keelerjr12 » Wed Mar 25, 2020 9:19 pm

March2009 wrote:
Wed Mar 25, 2020 9:01 pm
Maybe your question could be changed to: Why does anyone invest in non-technology funds?
I get what you’re going for but this isn’t exactly the best example to use. Reason why, technology stocks are highly correlated to the SP500 (pretty dang close to 1). Yes, sector risk would apply in this case, but with such a high correlation the risk is going to be low.

The correlation between US and international funds is approx. .7. This allows for risk reduction benefits.

BalancedJCB19
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Re: Why does anyone invest in international funds?

Post by BalancedJCB19 » Wed Mar 25, 2020 9:20 pm

I never did because I liked what John Bogle had to say about it. Glad I listened.

March2009
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Re: Why does anyone invest in international funds?

Post by March2009 » Wed Mar 25, 2020 9:29 pm

keelerjr12 wrote:
Wed Mar 25, 2020 9:19 pm
March2009 wrote:
Wed Mar 25, 2020 9:01 pm
Maybe your question could be changed to: Why does anyone invest in non-technology funds?
I get what you’re going for but this isn’t exactly the best example to use. Reason why, technology stocks are highly correlated to the SP500 (pretty dang close to 1). Yes, sector risk would apply in this case, but with such a high correlation the risk is going to be low.

The correlation between US and international funds is approx. .7. This allows for risk reduction benefits.
Isn't Technology the biggest S&P500 sector now (plus several of the large tech companies are included in other sectors).
In bear markets, stocks return to their rightful owners. - J.P. Morgan

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anon_investor
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Re: Why does anyone invest in international funds?

Post by anon_investor » Wed Mar 25, 2020 9:47 pm

Kenkat wrote:
Wed Mar 25, 2020 7:12 pm
anon_investor wrote:
Wed Mar 25, 2020 7:43 am
patrick wrote:
Tue Mar 24, 2020 8:27 pm
International has CRUSHED domestic since March 19, 2020:

+5.33% VTIAX (Vanguard Total International Stock Index Fund Admiral)
+1.98% VTSAX (Vanguard Total Stock Market Index Fund Admiral)
What about since Jan 1, 2020?
-28.33% VTIAX
-25.16% VTSAX
Stop quoting all that ancient history. January? That’s nearly three months ago. Didn’t you read the memo? Everything has changed now and we only look at fund performance over the following time periods:

Day to Date
1 day
3 days
5 days
10 days
15 days
Since inception*

* inception = the day the stock market started going down
In that case... why not some Boeing stock!!! A definitely winner the last 2 days! :moneybag :moneybag :moneybag

Thesaints
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Re: Why does anyone invest in international funds?

Post by Thesaints » Wed Mar 25, 2020 10:44 pm

Why does anyone invest in anything but the stock that records the best return ?

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anon_investor
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Re: Why does anyone invest in international funds?

Post by anon_investor » Wed Mar 25, 2020 10:50 pm

Thesaints wrote:
Wed Mar 25, 2020 10:44 pm
Why does anyone invest in anything but the stock that records the best return ?
So that is what I was supposed to do :oops: . Instead I have a bunch of VTSAX :sharebeer .

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Re: Why does anyone invest in international funds?

Post by KyleAAA » Thu Mar 26, 2020 1:20 am

So that the can own international stocks.

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Re: Why does anyone invest in international funds?

Post by MoneyMarathon » Thu Mar 26, 2020 1:35 am

Brianmcg321 wrote:
Tue Mar 24, 2020 5:24 pm
Why does anyone invest in international funds? Their returns are terrible.
To save on taxes, of course. :oops:

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Re: Why does anyone invest in international funds?

Post by Thesaints » Thu Mar 26, 2020 2:20 am

BalancedJCB19 wrote:
Wed Mar 25, 2020 9:20 pm
I never did because I liked what John Bogle had to say about it. Glad I listened.
Yet, comparing today to Feb 23, my foreign stock holdings lost 22.7% and my domestic ones lost 26.3%...

khh
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Re: Why does anyone invest in international funds?

Post by khh » Thu Mar 26, 2020 3:01 am

My advisor at Edward Jones says I should...

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Thu Mar 26, 2020 3:03 am

Anyone overweighting EM in exUS?

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Thu Mar 26, 2020 3:06 am

Randolph Mortimer wrote:
Wed Mar 25, 2020 7:18 pm
Why do I invest in international funds?

Because the returns are terrible.

I get extremely fearful when I feel like I am making too much money.

International funds help assuage that fear.
My favorite response on here so far. :sharebeer

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Thu Mar 26, 2020 3:08 am

I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Thu Mar 26, 2020 3:26 am

birdog wrote:
Thu Mar 26, 2020 3:08 am
I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.
Didn't Jack say also that nobody knows nothing? Why should he know any better? :mrgreen:

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Thu Mar 26, 2020 3:42 am

Stef wrote:
Thu Mar 26, 2020 3:26 am
birdog wrote:
Thu Mar 26, 2020 3:08 am
I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.
Didn't Jack say also that nobody knows nothing? Why should he know any better? :mrgreen:
Pretty sure you’re just being snarky as he was referring to stock picking and market timing. He actually claimed to know quite a lot regarding investing. I mean, he did create index funds and the largest investment company on the planet. :mrgreen:

JimBeam
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Re: Why does anyone invest in international funds?

Post by JimBeam » Thu Mar 26, 2020 3:59 am

Because international stocks cover ~45% of the global investable market capitalisation.

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Re: Why does anyone invest in international funds?

Post by rossington » Thu Mar 26, 2020 4:14 am

livesoft wrote:
Tue Mar 24, 2020 5:27 pm
Are you trying to shift discussions back to normal? If so, then consider this a trite response that just increases my post count. Thank you!
Do you have an understanding wife who knows what has been occupying a lot of your time over the last 13 years? :happy
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Thu Mar 26, 2020 4:21 am

birdog wrote:
Thu Mar 26, 2020 3:42 am
Stef wrote:
Thu Mar 26, 2020 3:26 am
birdog wrote:
Thu Mar 26, 2020 3:08 am
I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.
Didn't Jack say also that nobody knows nothing? Why should he know any better? :mrgreen:
Pretty sure you’re just being snarky as he was referring to stock picking and market timing. He actually claimed to know quite a lot regarding investing. I mean, he did create index funds and the largest investment company on the planet. :mrgreen:
But aren't you picking stocks if you leave out 45% of them?

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Thu Mar 26, 2020 4:35 am

Stef wrote:
Thu Mar 26, 2020 4:21 am
birdog wrote:
Thu Mar 26, 2020 3:42 am
Stef wrote:
Thu Mar 26, 2020 3:26 am
birdog wrote:
Thu Mar 26, 2020 3:08 am
I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.
Didn't Jack say also that nobody knows nothing? Why should he know any better? :mrgreen:
Pretty sure you’re just being snarky as he was referring to stock picking and market timing. He actually claimed to know quite a lot regarding investing. I mean, he did create index funds and the largest investment company on the planet. :mrgreen:
But aren't you picking stocks if you leave out 45% of them?
Perhaps you should directly research why two of the smartest investors in the world say you don’t need to hold international.

The crux of the case for not worrying about international diversification has always been that the multinationals that make up the S&P 500 generate a signification portion of their revenue from international markets. Holding an S&P index fund, where multinationals like or are generating plenty of money from international sales, is a sort of shortcut to international diversification. Because an S&P 500 index fund is one of the cheapest investments around in terms of fees — the expense ratio on those funds is often under 0.1 percent — it’s also a cheap way to diversify internationally. - Elizabeth MacBride (CNBC) explaining one reason why Bogle and Buffett say direct international investing is unnecessary.

Also, venturing outside the US involves unnecessary exposure to currency risk, economic risk and societal instability risk. - Jack Bogle.

U.S. shares — using the S&P 500 vs. the MSCI All Countries Index (minus the U.S.) as a benchmark — far outperformed shares in the rest of the world over the last decade. U.S. shares grew 186%, compared with 50% for the rest of the world. In 2019 alone, as of December 27, U.S. shares rose 29% vs. 19% for the rest of the world. - Terry Jones (IBD).

Buffett and Bogle say international is unnecessary and also comes with potential drawbacks. I defer to them.
Last edited by birdog on Thu Mar 26, 2020 5:13 am, edited 1 time in total.

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Thu Mar 26, 2020 5:12 am

Past performance is a terrible guide for the future - Jack Bogle.

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Thu Mar 26, 2020 5:14 am

Stef wrote:
Thu Mar 26, 2020 5:12 am
Past performance is a terrible guide for the future - Jack Bogle.
Remove the past performance difference argument and their other arguments still stand against you, Stef. No one is stopping you from buying international if you want it. Have at it. But taking on extra risk just to increase diversification in an already sufficiently diversified portfolio doesn’t make sense to me.

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Re: Why does anyone invest in international funds?

Post by 3funder » Thu Mar 26, 2020 7:49 am

Every dog has his/her day.

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Re: Why does anyone invest in international funds?

Post by caklim00 » Thu Mar 26, 2020 9:19 am

Why doesn't everyone just do Calls or Puts on TESLA. That would have made you much more! Seriously, this forum has gone significantly downhill since I joined over 10 years ago.

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Re: Why does anyone invest in international funds?

Post by ZumZabo » Thu Mar 26, 2020 9:31 am

Toadandfriends wrote:
Wed Mar 25, 2020 9:35 am
What a great question!!! Thank you for asking. I invest in international funds bc when I read the US news I can't tell...is this from The Onion or is this for real???? 50% US 50% Intl
Same here. 50/50 but I have never been able to state it so well. Forgive me if I plagiarize you in the future. I do my best work when I am plagiarizing. :)
What made me think I could start clean slated? The hardest to learn was the least complicated: Emily Saliers / And if I claim to be a wise man, it surely means that I don't know: Kerry Livgren

lgs88
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Re: Why does anyone invest in international funds?

Post by lgs88 » Thu Mar 26, 2020 9:33 am

I just don't see why I should own GM but not Toyota.
merely an interested amateur

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Re: Why does anyone invest in international funds?

Post by DB2 » Thu Mar 26, 2020 9:52 am

lgs88 wrote:
Thu Mar 26, 2020 9:33 am
I just don't see why I should own GM but not Toyota.
Agreed (and if I had to choose, I would take Toyota over any of the big 3 for the long haul).

BalancedJCB19
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Re: Why does anyone invest in international funds?

Post by BalancedJCB19 » Thu Mar 26, 2020 11:42 am

Thesaints wrote:
Thu Mar 26, 2020 2:20 am
BalancedJCB19 wrote:
Wed Mar 25, 2020 9:20 pm
I never did because I liked what John Bogle had to say about it. Glad I listened.
Yet, comparing today to Feb 23, my foreign stock holdings lost 22.7% and my domestic ones lost 26.3%...
Yes, I really should have explained my reply. It doesn't matter to me if international does better or not and that is not reason I didn't invest in it. I just thought it through and sided with Mr. Bogle and this has been for over two decades. The bottom line for me is creating a portfolio where I can stay the course no matter what and it has served me well.

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Re: Why does anyone invest in international funds?

Post by panhead » Thu Mar 26, 2020 11:50 am

Brianmcg321 wrote:
Tue Mar 24, 2020 5:24 pm
Why does anyone invest in international funds? Their returns are terrible.










Your welcome everyone. Just doing my part. :sharebeer

This has been as entertaining to watch as some of the crazier threads! Nice work!

Thesaints
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Re: Why does anyone invest in international funds?

Post by Thesaints » Thu Mar 26, 2020 11:59 am

BalancedJCB19 wrote:
Thu Mar 26, 2020 11:42 am
Thesaints wrote:
Thu Mar 26, 2020 2:20 am
BalancedJCB19 wrote:
Wed Mar 25, 2020 9:20 pm
I never did because I liked what John Bogle had to say about it. Glad I listened.
Yet, comparing today to Feb 23, my foreign stock holdings lost 22.7% and my domestic ones lost 26.3%...
Yes, I really should have explained my reply. It doesn't matter to me if international does better or not and that is not reason I didn't invest in it. I just thought it through and sided with Mr. Bogle and this has been for over two decades. The bottom line for me is creating a portfolio where I can stay the course no matter what and it has served me well.
Ah, but if your objective in investing is not to obtain the best return for the risk you allowed things are different!
There is such a thing as “aesthetic investing”, where criteria are rhyming tickers, or color matching of the corporations logos.

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Re: Why does anyone invest in international funds?

Post by Noobvestor » Fri Mar 27, 2020 12:57 am

Stef wrote:
Thu Mar 26, 2020 3:03 am
Anyone overweighting EM in exUS?
Yes. I'm 50/50 developed/emerging within international (50/50 US/international)
birdog wrote:
Thu Mar 26, 2020 4:35 am
Also, venturing outside the US involves unnecessary exposure to currency risk, economic risk and societal instability risk. - Jack Bogle.
"If there's one place I don't want people to take my advice, it's international. I want you to think it through for yourself." - Jack Bogle

viewtopic.php?t=104781
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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spdoublebass
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Re: Why does anyone invest in international funds?

Post by spdoublebass » Fri Mar 27, 2020 1:13 am

Last 20 years since Jan 2000, LTT beat Us and International stock.

https://www.portfoliovisualizer.com/bac ... ion3_3=100
I'm trying to think, but nothing happens

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Noobvestor
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Re: Why does anyone invest in international funds?

Post by Noobvestor » Fri Mar 27, 2020 1:15 am

spdoublebass wrote:
Fri Mar 27, 2020 1:13 am
Last 20 years since Jan 2000, LTT beat Us and International stock.

https://www.portfoliovisualizer.com/bac ... ion3_3=100
Could do that again I suppose if long-term Treasuries trend down and land at negative 5% nominal yields I suppose. What a world that would be!
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Luckywon
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Re: Why does anyone invest in international funds?

Post by Luckywon » Fri Mar 27, 2020 1:28 am

It's not the lost money that's bad, it's these threads that reappear at each milepost. Usually. But in this case, granted, a nice distraction :sharebeer

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 6:12 am

Luckywon wrote:
Fri Mar 27, 2020 1:28 am
It's not the lost money that's bad, it's these threads that reappear at each milepost. Usually. But in this case, granted, a nice distraction :sharebeer
Yep. I knew this thread was kind of like click bait, but I just couldn’t resist. It was fun to get back to arguing about our old arguments instead of about our new argument. :sharebeer

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tvubpwcisla
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Re: Why does anyone invest in international funds?

Post by tvubpwcisla » Fri Mar 27, 2020 6:18 am

I like International because Nestle products (Ticker Symbol - OTCMKTS: NSRGY) taste so good!

...time for breakfast, gotta run!

:P
The secret to building wealth is to have a plan, keep expenses low, become an expert in your craft, consistently buy the market, diversify, establish multiple income streams, and always smile.

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 6:41 am

tvubpwcisla wrote:
Fri Mar 27, 2020 6:18 am
I like International because Nestle products (Ticker Symbol - OTCMKTS: NSRGY) taste so good!

...time for breakfast, gotta run!

:P
Don’t you mean, gotta hop?

columbia
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Re: Why does anyone invest in international funds?

Post by columbia » Fri Mar 27, 2020 6:52 am

In terms of the question at hand:

Some choose to do so for the perceived future potential benefits of diversification. That can cut in both directions, so it might or might not yield the results one is seeking.

There’s no correct answer, of course. If you’re not comfortable with it, it’s easy to avoid it. If you are, dive in!
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Why does anyone invest in international funds?

Post by FlyerJack » Fri Mar 27, 2020 7:35 am

I know it’s a joke thread, but I like owning Toyota, Samsung, Unilever, Nestle, Sony, etc. etc., through VTIAX. Maybe one day they will make me as much money as VTSAX.

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 7:40 am

columbia wrote:
Fri Mar 27, 2020 6:52 am
In terms of the question at hand:

Some choose to do so for the perceived future potential benefits of diversification. That can cut in both directions, so it might or might not yield the results one is seeking.

There’s no correct answer, of course. If you’re not comfortable with it, it’s easy to avoid it. If you are, dive in!
Thank you for bringing it back.

I understand why some choose to invest internationally and I understand why some choose not to. The reasons not to make more sense to me so that is the approach I take.

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Re: Why does anyone invest in international funds?

Post by asif408 » Fri Mar 27, 2020 7:53 am

Stef wrote:
Thu Mar 26, 2020 3:03 am
Anyone overweighting EM in exUS?
I do, pretty dramatically (my overall portfolio is 90% international equities, with 70% of that in EM, the other 10% is in US). I'm been singing "Soy un perdedor" for a few years now, hopefully my tune will change in a few years and I can start singing "Soy un ganador".

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Fri Mar 27, 2020 8:08 am

asif408 wrote:
Fri Mar 27, 2020 7:53 am
I do, pretty dramatically (my overall portfolio is 90% international equities, with 70% of that in EM, the other 10% is in US). I'm been singing "Soy un perdedor" for a few years now, hopefully my tune will change in a few years and I can start singing "Soy un ganador".
According to Vanguard market cap weights, neutral would be:

55% US
35% Developed Markets
10% Emerging Markets

I'm going for 60% US, 15% Switzerland (home bias), 12.5% Developed and 12.5% EM.

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Re: Why does anyone invest in international funds?

Post by Peculiar_Investor » Fri Mar 27, 2020 8:16 am

Are we getting close to the point where someone starts the Final, definitive topic on international investing.

It could be used to summarize the 738 (and counting) topics that already exist on the subject.

My take, just about everyone has a viewpoint, there is no consensus, and no-one seems to be changing their view based on what others have posted. Carry-on.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams

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Re: Why does anyone invest in international funds?

Post by lostdog » Fri Mar 27, 2020 8:22 am

International out performs for 10years.

U.S. only boglehead: "Jack and Warren said no international needed. I'll just keep my head in the sand. They're always right and they'll be right again."
Global Market Cap Equity || 6 Months Cash || Staying The Course

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Fri Mar 27, 2020 8:34 am

lostdog wrote:
Fri Mar 27, 2020 8:22 am
International out performs for 10years.

U.S. only boglehead: "Jack and Warren said no international needed. I'll just keep my head in the sand. They're always right and they'll be right again."
I still don't get why any of them should know what the future will be?

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 8:41 am

lostdog wrote:
Fri Mar 27, 2020 8:22 am
International out performs for 10years.
U.S. shares — using the S&P 500 vs. the MSCI All Countries Index (minus the U.S.) as a benchmark — far outperformed shares in the rest of the world over the last decade. U.S. shares grew 186%, compared with 50% for the rest of the world. In 2019 alone, as of December 27, U.S. shares rose 29% vs. 19% for the rest of the world. - Terry Jones (IBD).

Over the last 10 years when you compare VTI (total stock market U.S.) with VXUS (total int'l stock) the CAGR is 13.10% and 5.58% respectively.

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Re: Why does anyone invest in international funds?

Post by convert949 » Fri Mar 27, 2020 8:44 am

birdog wrote:
Thu Mar 26, 2020 3:08 am
I don’t, partly due to poor performance and confidence issues with international and partly because the two smartest investors I know, Jack Bogle and Warren Buffett, said I don’t need to.
Hmmm... What has impressed me in this experience of the past few weeks is that after several years of the "fans of international" saying "just wait, international will outperform", the truth is that they have lost nearly as much as US equities since this started after not performing well for the past several years. It took all of one week for my last purchase of Total International Stock Index (2016) to go negative. I purchased it as the Vanguard Planner said I needed more. I have sold it to take advantage of TLH and purchased VTSAX with the proceeds. Not sure if I will return after 30 days...

At 70 YO, not sure if I want the currency risk and lack of transparency associated with much of the international arena. Full disclosure, I still hold international but in an amount closer to Jack's 20% recommendation. Having said that, I am certainly willing to concede that the rules might be different for those younger with extended investment horizons...

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Re: Why does anyone invest in international funds?

Post by lostdog » Fri Mar 27, 2020 8:45 am

birdog wrote:
Fri Mar 27, 2020 8:41 am
lostdog wrote:
Fri Mar 27, 2020 8:22 am
International out performs for 10years.
U.S. shares — using the S&P 500 vs. the MSCI All Countries Index (minus the U.S.) as a benchmark — far outperformed shares in the rest of the world over the last decade. U.S. shares grew 186%, compared with 50% for the rest of the world. In 2019 alone, as of December 27, U.S. shares rose 29% vs. 19% for the rest of the world. - Terry Jones (IBD).

Over the last 10 years when you compare VTI (total stock market U.S.) with VXUS (total int'l stock) the CAGR is 13.10% and 5.58% respectively.
I don't invest based on past performance, do you?
Global Market Cap Equity || 6 Months Cash || Staying The Course

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 9:02 am

lostdog wrote:
Fri Mar 27, 2020 8:45 am
birdog wrote:
Fri Mar 27, 2020 8:41 am
lostdog wrote:
Fri Mar 27, 2020 8:22 am
International out performs for 10years.
U.S. shares — using the S&P 500 vs. the MSCI All Countries Index (minus the U.S.) as a benchmark — far outperformed shares in the rest of the world over the last decade. U.S. shares grew 186%, compared with 50% for the rest of the world. In 2019 alone, as of December 27, U.S. shares rose 29% vs. 19% for the rest of the world. - Terry Jones (IBD).

Over the last 10 years when you compare VTI (total stock market U.S.) with VXUS (total int'l stock) the CAGR is 13.10% and 5.58% respectively.
I don't invest based on past performance, do you?
You're the one that said international out performs for 10 years. I was just proving your assertion false.

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Stef
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Re: Why does anyone invest in international funds?

Post by Stef » Fri Mar 27, 2020 9:06 am

birdog wrote:
Fri Mar 27, 2020 9:02 am
You're the one that said international out performs for 10 years. I was just proving your assertion false.
How do you know that his statement is false? Don't we have to wait 10 years?

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birdog
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Re: Why does anyone invest in international funds?

Post by birdog » Fri Mar 27, 2020 9:13 am

Stef wrote:
Fri Mar 27, 2020 9:06 am
birdog wrote:
Fri Mar 27, 2020 9:02 am
You're the one that said international out performs for 10 years. I was just proving your assertion false.
How do you know that his statement is false? Don't we have to wait 10 years?
He didn't say it "will" outperform for the next 10 years.

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