How much of your equities in international?

[bcinvest]

Marc thanks for the kind words. I have no doubt you will be able to master value investing. One book I would highly recommend is The (Mis)Behavior of Markets by Benoit Mandelbrot.

"I'm a long way from abandoning the indexing investment strategy I settled on "

I originally started index investing and transitioned over a period of about 5 years until I was completely invested in individual issues. Never despise small beginnings.

[REWahoo]

Quote:

Originally Posted by bcinvest Once I figure out how to start a new thread I'll start one discussing investment strategy to avoid cluttering an international asset allocation thread with this material.

Go here and click on the prominent "New Thread" box at the upper left.

[Texas Proud]

Quote:

Originally Posted by bcinvest You confuse my opinions with my personality. I am extremely opinionated and many may disagree that doesn't bother me one bit. Everyone is welcome to their own investment strategy and I have not criticized anyone's strategy. I have criticized asset allocation, mpt and some of the closed mindedness I have run into already.

First... welcome to the board... hope you can make a contribution and not be attacked much...

But.. let's be a little more clear on your post... you state you have not criticized anyone's strategy, but in the next sentence you say you criticize asset allocation... well, that is the investment strategy for a lot of people... so you ARE criticizing their style...

And asset allocation and index investing has proven to be the easiest to implement and follow... and has (in the long run) proven to beat the vast majority (like 90% plus) of the people who invest people's money for a living.. I can guarantee you that I would much prefer to easily pick the 90% level than work hard to find one that is in that last 10% when I have a lot better chance of picking one in the bottom 80%....

[Alan]

Quote:

Originally Posted by REWahoo Go here and click on the prominent "New Thread" box at the upper left.

BCI, please take this advice seriously. If you cannot figure out how to start a new thread and instead continue to hi-jack other threads then you will immediately find yourself breaking the Community Rules (you can find a link to them at the bottom of the page).

[Nords]

Quote:

Originally Posted by Marc1962 As an E-R.org newcomer who has been treated well and who has benefited greatly from the kindness and generosity of this community, I am disappointed by the prickly, defensive way in which he is being treated. After re-reading every one of his posts, I think we're being awfully rough. In my opinion, E-R.org would be even better than it is if we were willing to welcome experienced retirees and investors with strong opinions as graciously as we do incompetent, humble beginners.

Marc, you might want to take note of your thoughts and check back on them in six or seven years to see if you feel differently. Or, better yet, volunteer to be a moderator. Then you can walk the talk.

BCInvest is displaying a fairly common pattern of behavior that's been repeated all too often on this board over the years. It starts with their apparent inability (or lack of interest) in comprehending the social implications behind the guidelines of "Don't be a jerk." Their "contributions" don't improve with time and their result has been pretty much the same: rocketing into the top 10 of the "Ignore Poster" list culminating in "suicide by moderator".

Value investors may be uncommon, but good value analysis is not. I think there are plenty of places to learn the principles and practice their application. In this case it's difficult to accept that the manner of delivery is justified by the quality of the message.

I think we have to also remind ourselves of the investment analysts's conundrum: "If they're so good, then why aren't they rich?" Or its corollary: "If they're making so much money from their fundamental valuation analysis, then why do they have to charge for their newsletters?" And its other corollary: "If they're doing so well with their analysis and their newsletter writing, then why aren't they doing more of it? Why do they have to come to Internet discussion boards and dump hostile posts on DIY investors?"

[M Paquette]

Quote:

Originally Posted by Nords I think we have to also remind ourselves of the investment analysts's conundrum: "If they're so good, then why aren't they rich?"

Reminds me of a former associate who was constantly stalking The Next Big Thing. When he'd tell us how he was doing, his portfolio was growing by some spectacular percentage, and there were a couple of hot stocks that he was quite proud of. Then again, sometimes he didn't comment on how he was doing, but that was when his holdings in ATHM or JDSU were in free-fall.

He was quite good at it, though, and became a millionaire on three different occasions. I would have thought becoming and remaining a millionaire one time would have been more effective, but that's just me.

[easysurfer]

Reminds me of a time of a co-w*rker in a casino (we had a conference there as a business trip, in the 80's, decade of greed is good). He said that at the blackjack table, he finally had broke even. But the non-verbal message said otherwise. I didn't question him, and just said, "that's good....I'm happy for you" but I left wondering how much he probably lost.

When someone says, "this strategy has beaten the index 10 out of 11 years" etc., I'm glad I stick to indexing as my strategy

[M Paquette]

Quote:

Originally Posted by easysurfer When someone says, "this strategy has beaten the index 10 out of 11 years" etc., I'm glad I stick to indexing as my strategy

Yah. Especially when Year 11 turns out to be March 2008-March 2009. Makes me glad to be a Dirty Asset Allocator.

[Nords]

Quote:

Originally Posted by M Paquette He was quite good at it, though, and became a millionaire on three different occasions. I would have thought becoming and remaining a millionaire one time would have been more effective, but that's just me.

If you choose your risk definitions with a little care, then volatility becomes irrelevant...

[Marc1962]

We're far enough apart on this issue that I don't think there's any reason to discuss it further. Let's just agree to disagree. I'll continue to be disappointed in the E-R.org community's response to bcinvest, and you presumably will continue to think as you indicate below.

Quote:

Originally Posted by Nords Marc, you might want to take note of your thoughts and check back on them in six or seven years to see if you feel differently. Or, better yet, volunteer to be a moderator. Then you can walk the talk. BCInvest is displaying a fairly common pattern of behavior that's been repeated all too often on this board over the years. It starts with their apparent inability (or lack of interest) in comprehending the social implications behind the guidelines of "Don't be a jerk." Their "contributions" don't improve with time and their result has been pretty much the same: rocketing into the top 10 of the "Ignore Poster" list culminating in "suicide by moderator". Value investors may be uncommon, but good value analysis is not. I think there are plenty of places to learn the principles and practice their application. In this case it's difficult to accept that the manner of delivery is justified by the quality of the message. I think we have to also remind ourselves of the investment analysts's conundrum: "If they're so good, then why aren't they rich?" Or its corollary: "If they're making so much money from their fundamental valuation analysis, then why do they have to charge for their newsletters?" And its other corollary: "If they're doing so well with their analysis and their newsletter writing, then why aren't they doing more of it? Why do they have to come to Internet discussion boards and dump hostile posts on DIY investors?"

[Nords]

Quote:

Originally Posted by Marc1962 We're far enough apart on this issue that I don't think there's any reason to discuss it further. Let's just agree to disagree. I'll continue to be disappointed in the E-R.org community's response to bcinvest, and you presumably will continue to think as you indicate below.

No problem-- I've seen the attitude before-- good luck with it.

[HornedToad10]

Quote:

Originally Posted by veremchuka i appreciate this thread tho there has been a distracting theme in it. after reading various comments i see my international exposure is low and i need to do some shifting from a to b so to speak. i did not realize vanguard had such a high suggestion for international. i would have thought as a retiree having about 12 or 13% was adequate. yet it is about risk and how/when does one decide whether to take more or less? in one respect i should be more conservative and not take as much equity risk about 65% cuz i really don't need to. so if i am going to have that much in equities then i should bump up the foreign by reducing the domestic. very enlightening thread.

Hi Veremchuka,

You may already know this, (I couldn't tell from the post) but the percent of international is phrased as a percent of the equity portion of the portfolio, and not the % of the entire portfolio. i.e. as a retiree you may be 40-50% stocks and 50-60% bonds and so 30% international of the 40% equity investment works out to only be 12% of the total portfolio.

That said, imo, 25-35% international is probably less risky over the next 20 years than being strictly invested in domestic companies.

[Sarah in SC]

Quote:

Originally Posted by Marc1962 We're far enough apart on this issue that I don't think there's any reason to discuss it further. Let's just agree to disagree. I'll continue to be disappointed in the E-R.org community's response to bcinvest, and you presumably will continue to think as you indicate below.

Trust me--after some time as a mod (and member), I can tell you that this is a pretty predictable pattern, but we all learn at our own pace.

[veremchuka]

Quote:

Originally Posted by HornedToad10 Hi Veremchuka, You may already know this, (I couldn't tell from the post) but the percent of international is phrased as a percent of the equity portion of the portfolio, and not the % of the entire portfolio. i.e. as a retiree you may be 40-50% stocks and 50-60% bonds and so 30% international of the 40% equity investment works out to only be 12% of the total portfolio. That said, imo, 25-35% international is probably less risky over the next 20 years than being strictly invested in domestic companies.

right now i thought it was the entire portfolio but now that i did the calc of intl : total equity my intl is 13% so i guess i forgot the op's question but when i answered i had it right. thank you for the info tho.

i still think my intl is a bit on the low side. i'm reading the excellent thread LOL moderated back in 2007 on asset allocation. until i get a better grasp on this i'm not doing anything but i think i do need to correct some of my investments. the more i read the more i realize that i'm not as well diversified as i would like to have thought i was.

[swampwiz]

Back when I had my 401K - which allowed for transfer between funds (but required 30 days to go back to that fund that had been transferred from) - I would employ a certain strategy. If I was at time invested in the international market (i.e., an EAFE based fund), I would pick out a trading day in which the US markets had a time profile of a drop in the earlier part of the day and a contrary gain in the later part of the day, and than I would transfer to the US market (i.e., an S&P 500 or Russell 2500 based fund.) I would wait for the converse - a trading day in which the US market has a time profile of a drop in the later part of the day (especially one in which the market just tanked as the trading day ended) - and then transfer back into the US market. Of course, I would look for long term trends to try and avoid the situation in which the fund I would getting back into had a higher price then what I had sold it at!

This strategy had worked wonders for my portfolio, as I was able to double my money relative to the market over about a 2 year period in 2002-2004. However, once the Euro became overpriced, I had to avoid this strategy as I didn't want to be long in the Euro when it came back down. I got back into the strategy in 2007-2009 and beat the market about 35% over that time frame.

Because of my Chapter 7 bankruptcy and need to generate cash, I had to liquidate out of the 401K and as of yet, I have not found a brokerage or fund family that allows me to do such trading without the imposition of onerous fees and/or waiting time; there do seems to be some fund families that somewhat allow this, but they play games with the pricing of the international fund which removes any possible gains.

Instead I try to play within the big US indices - S&P 500, Russell 2000, Nasdaq 2000 - using leverage whenever the market dips. For example, during the dip of 2010, I ended up leveraging to eventually as much as about 60%, which I carried up as the market moved back up, earning about a net 15% gain relative to the market.

[rescueme]

Of the equity portion of my/DW's combined retirement portfolio, we're at 26% international, FWIW...

[kumquat]

Quote:

Originally Posted by swampwiz This strategy had worked wonders for my portfolio, as I was able to double my money relative to the market over about a 2 year period in 2002-2004. ............. I got back into the strategy in 2007-2009 and beat the market about 35% over that time frame. Because of my Chapter 7 bankruptcy .......

Are the two related?

[DRiP Guy]

Quote:

Originally Posted by bcinvest You confuse my opinions with my personality. I am extremely opinionated and many may disagree that doesn't bother me one bit. Everyone is welcome to their own investment strategy and I have not criticized anyone's strategy. I have criticized asset allocation, mpt and some of the closed mindedness I have run into already. I commend you for being highly suspicious, I am too. And, be careful with the use of professional. I publish a small newsletter and charge money to force me to do it. I have no designs on making any money from it or managing anyone's portfolio. I would highly recommend nobody entrust their assets to anyone who can have access to them. The forums getting started message states "When you are ready, please introduce yourself by starting a new thread in the “Hi, I Am” section". When I was ready I was going to make a post. I am still not familiar with the navigation yet and was waiting to get up to speed to state my case. Imagine how welcoming it is to get a response that says "Our community is more welcoming to new members who post an introduction on our "Hi, I am...." forum, BCInvest" So the welcome message says one thing but the attitude is completely different in practice. And once one poster takes offense to my opinion it becomes like a shark feeding frenzy and everyone takes a shot. So judge by the quality of my input not by how closely my views align with yours. I am a pretty easy going guy with very little ego. So don't worry nothing you say on a message board is gonna hurt my feelings. If some value my input I'll hang around. If not I have plenty of competing interests for my time. Oh and I do taxes, but it is all pro bono so no I don't need any new customers. So I have no interest in selling that either (the pay is really bad). Once I figure out how to start a new thread I'll start one discussing investment strategy to avoid cluttering an international asset allocation thread with this material.

[swampwiz]

Quote:

Originally Posted by kumquat Are the two related?

You could say that the $20K or so losses I took in 2008 helped to exacerbate my financial condition. But realistically, all that happened was that my day of bankruptcy destiny was moved up a few months (especially after Chase et al raised my minimum payment, I had debt payments of near $5K/month on ZERO income!)

Fortunately, for all the loses I incurred in my non-retirement account, I incurred gains in my retirement accounts, so it all worked to the best in the end.