International in a 3-fund portfolio

[winyaz]

Yes, US has outperformed International stocks for the past decade. So where does that leave us now? US stocks are overvalued relative to International stocks, and especially Emerging Market stocks. If I were to bet I would pick International stocks to outperform over the next decade, but mostly I just diversify globally.

This article shows the value in diversifying globally over the past century:
https://mebfaber.com/2019/07/08/i-dont-feel-overweight/

 

[DayDreaming]

So, are you confused at a higher level now or have you come up with strategy?

Hearing other opinions is always helpful.
No new strategy yet.

 

[DayDreaming]

Okay, to answer my own question, I played around with some other international funds, and just changing VFWAX (All-World ex-US) to VINEX (Vanguard International Explorer Inv) makes quite a difference.

In this scenario, my thought of going to a 2-fund portfolio with no international would be the worst choice (red line in the chart below).

So, my new strategy will be to do more research and thinking before changing anything.

link to Portfolio Visualizer

 

[rayvt]

just changing VFWAX (All-World ex-US) to VINEX (Vanguard International Explorer Inv) makes quite a difference.

Yes, it sure makes a difference. Because VINEX is a small-cap fund. And just look at that volatility (portfolio #3 in the PV link). Change the start year from 2002 to 2008 and see how it looks. Ugh.

 

[rayvt]

If you don't mind being a little more active, take a look at Antonacci's Global Equity Momentum (GEM) strategy. It switches between US and non-US. And bonds or cash.

Much better return (but just slightly better if you use cash instead of bonds) and much better risk metrics than the non-dynamic portfolios you linked.
https://www.portfoliovisualizer.com...eriodUnit=2&volatilityPeriodWeight=0&total1=0

You just have to decide if the extra work is worth it to you. Personally, I like the idea of growing $10,000 to $58,000 better than growing $10,000 to $35,000.