International has been a real disappointment

[Ed_The_Gypsy]

Quote:

Originally Posted by redduck I think Ed may be thinking of a different John Templeton (e.g. Jack Bogle?).

Sorry. Jack Bogle. Templeton did make a lot of money in international real estate. My bad.

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[Running_Man]

Quote:

Originally Posted by Lsbcal Multiple choice test here, pick one : 1) There is a clear trend line down if we do a linear regression fit. 2) The US dollar is just a bit under where it was in the 1970's. Just returning to it's natural place in the universe of currencies. 3) This past data in this chart doesn't tell us where we are going in the future. 4) None of the above. Regarding international, FWIW I tend to go with a momentum approach so have some in small cap international and none in international large cap.

The dollar is where it was in the 70’s, in the 80’s, in the 90’s in the 2000’s and now in the 2010’s, the entirety of the argument that it is in a major downtrend is dependent of the period when US bonds averaged a real 5-7 percent return in the 1980’s due to Paul Volker, if you take that away the dollar has averaged +- 20% range over 30+ years. Over the entire 45 years shown the dollar index shows a decline of 8.2% or about 0.18% decline annually, about as much as a Vanguard index fund expense ratio.

[target2019]

Adding link to Asset Returns chart referred to by Midpack in another thread.

https://novelinvestor.com/asset-class-returns/

The chart adds REIT to the asset classes. Interesting that REIT or EM rank #1 in 12 of past 15 years.

[Gone4Good]

Quote:

Originally Posted by Running_Man The dollar is where it was in the 70’s, in the 80’s, in the 90’s in the 2000’s and now in the 2010’s, the entirety of the argument that it is in a major downtrend is dependent of the period when US bonds averaged a real 5-7 percent return in the 1980’s due to Paul Volker, if you take that away the dollar has averaged +- 20% range over 30+ years. Over the entire 45 years shown the dollar index shows a decline of 8.2% or about 0.18% decline annually, about as much as a Vanguard index fund expense ratio.

Nope.

Starting from the end of the post-Volker decline in 1987, the USD still has a downward trend. I can't figure out how to put a trend line in FRED data (so see image attached for that):



As far as the impact on returns. the way to measure trends in cyclical data is by measuring from peak to peak or trough to trough. To exclude the Volker Peak we'll measure trough to trough. Starting with the 1978 trough of 90 and going to the 2011 trough of 68 gives us a negative average annualized return of 0.85%.

The slope of the trend line in the attached chart from 1987 works out to be 0.7% per year - so in the same ballpark

[Gone4Good]

For what it's worth (which is probably nothing) the last two big USD rallies lasted for five years and seven years respectively. The current rally is now in it's 5th year.

[MichaelB]

Trying to predict where currencies are headed is a surefire way to lose money. That said, it appears the Fed may have softened it's stance on interest rates over the past week, easing up on the "raise rates or bust" view that has prevailed for the past couple of years. That could signal the US$ has hit it's peak.

Either way, I increased my equity allocation earlier in the year, all international developed and EM, and am now up to 52% equities, of which 55% is non-US. But, then again, I've always been a glutton for punishment.

[target2019]

One pillar we have is 401K - 50% US small/mid, 35% Int'l, 15% stable value.
The pillar has sunk a bit since 2014...

[Gone4Good]

I feel comfortable saying that in 10 years the S&P will be above it's current value of about 2065. Don't need to predict the market to make that statement.

I also feel comfortable saying that in 10 years the USD index will be below today's value of 90.

I have absolutely no idea the path either will take in between or what the ultimate highs or lows will be. All I know is that both trends are fairly highly probable.

[Bestwifeever]

We have held ex-US equities and bonds only to the extent that they are held in VG's Wellesley, Wellington, and total bond market. That's our AA and I'm sticking to it.

[Running_Man]

Quote:

Originally Posted by Gone4Good Nope. Starting from the end of the post-Volker decline in 1987, the USD still has a downward trend. I can't figure out how to put a trend line in FRED data (so see image attached for that): As far as the impact on returns. the way to measure trends in cyclical data is by measuring from peak to peak or trough to trough. To exclude the Volker Peak we'll measure trough to trough. Starting with the 1978 trough of 90 and going to the 2011 trough of 68 gives us a negative average annualized return of 0.85%. The slope of the trend line in the attached chart from 1987 works out to be 0.7% per year - so in the same ballpark

If you use your slope line we have been over the trend for only 7 years and 17 years under the trend? To be on equal time basis Isn’t that the only thing that matters for a currency time it spends at a level not the absolute high point for shorter periods? On a time basis it is a nearly straight line through 89 with fluctuations +- 20%

[eta2020]

This negative thinking about international markets implies to me you are better to be in VXUS then in VTI.

Having said that I will continue my ratio of US/International.

[Fedup]

After reading this, I think my funny money, borrowing from another thread is going to EM.


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[petershk]

Quote:

Originally Posted by frank2009 I gave up guessing. My entire equity portfolio is in VT.

Hehehe... I'm getting closer and closer to this as I go.

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[eta2020]

Quote:

Originally Posted by petershk Hehehe... I'm getting closer and closer to this as I go. Sent from my HTC One_M8 using Early Retirement Forum mobile app

Why pay 0.14% fees in VT if you can split money 50/50 between VTI and VXUS and pay 0.05% and 0.13% averaging 0.09% in fees.

[Totoro]

My equity is split in two: Trackers & individual (experiment). Trackers are 65% VT, 25% VOE.

In 8 years or so I'll reassess. If VOE doesn't outperform substantially I'll move that to VT as well. Same for individual.

Portfolio of DM is 30% equities, all in VT.

[Totoro]

Quote:

Originally Posted by eta2020 Why pay 0.14% fees in VT if you can split money 50/50 between VTI and VXUS and pay 0.05% and 0.13% averaging 0.09% in fees.

Fair point. Automatic rebalancing mostly. That's worth the 0.05% difference for me.

But I did wonder a few times why the fees are higher. Doesn't make sense.

[eta2020]

Quote:

Originally Posted by Totoro Fair point. Automatic rebalancing mostly. That's worth the 0.05% difference for me. But I did wonder a few times why the fees are higher. Doesn't make sense.

I do not rebalance. I just let them go.....

On 3 000 000 balance 0.05% comes up to 1500 bucks. That is not unusual balance on this forum. So it is real money

[Totoro]

Like I said, fair point

My tracker portfolio is much less than 3M. Rebalancing should boost the volatility/return profile by a bit too. No idea if that matches the higher fees, my crystal ball is still in the repair shop.

There is also an admiral shares version of VXUS, VTIAX. Has 0.12%.