For as long as I can remember, Bogle has been a US centric investor wanting US citizens to put little or nothing into international equities. Within the US he has been a pure market-capitalization investor, not a slice-and-dice investor. His greatest contributions in my opinion have been that "Costs Matter" and giving us an inexpensive alternative to playing pick the portfolio manager.
In contrast, Vanguard's website says:
This seems to be a risk equals volatility argument based on historical US performance. While volatility is certainly a issue, especially during the withdrawal stage, it is not the only issue. A Japanese investor probably saw similar advice prior to the peak of the Japanese stock market. If I recall correctly, Less Antman once posted that a Japanese investor with a 50/50 domestic/international stock portfolio was back to the portfolio's peak value within a decade. A 100% Japanese portfolio has certainly not fared as well.
A quick little Google search found this page
U.S., Japan Gain On Rest Of World In 2013 which indicates that US market capitalization is currently slightly over one third of worldwide stock market capitalization. Though the
Vanguard Total World Stock Index Fund page indicates a country diversification of 49% of common stock in the United States.
Historically, when Briton ruled the waves, a British citizen considered it perfectly normal that he could order goods, invest, and travel nearly anywhere in the world. Eventually the world experienced protectionism, depressions, confiscations, and wars which disrupted this happy state. Currently a US citizen considers it perfectly normal to order goods, invest, and travel nearly anywhere in the world. Until that changes, I think investing globally makes a lot of sense. However, if that changes during your lifetime, don't assume your crystal ball is so much better than everyone else's crystal ball that you will be able to repatriate your international investments to the US without taking a severe haircut as many people all head for the exits at once.
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