|
|
04-20-2015, 12:43 PM
|
#21
|
Recycles dryer sheets
Join Date: Sep 2012
Posts: 459
|
My advisor has me in 35% in International and 30% in Domestic. It hurt me last year but hoping it'll make up for it this year.
__________________
Retired at age 52 on 12/1/2016
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
04-20-2015, 12:46 PM
|
#22
|
Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,069
|
I do 55/35/10 us/int/emerging
Sent from my iPhone using Early Retirement Forum
|
|
|
04-20-2015, 01:38 PM
|
#23
|
Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
|
Didn't read all the replies yet, apologies if I'm repeating.
One motivation probably is that the US economy is becoming smaller %-wise as a part of the world as a whole.
Has been going on for a while, and is expected to continue.
The shift now can be decent timing-wise as Europe & other markets seem to have lower valuations vs. the US.
|
|
|
04-20-2015, 01:57 PM
|
#24
|
gone traveling
Join Date: Sep 2013
Posts: 1,248
|
Quote:
Originally Posted by Totoro
Didn't read all the replies yet, apologies if I'm repeating.
One motivation probably is that the US economy is becoming smaller %-wise as a part of the world as a whole.
Has been going on for a while, and is expected to continue.
The shift now can be decent timing-wise as Europe & other markets seem to have lower valuations vs. the US.
|
Foreign sales of S&P 500 accounts for over 33% and is growing. I do not think that portion is counted as part of US economy.
So I think owning great multinationals (PM, KO, GE, PEP, JNJ, PG) gives one nice high quality, wide moat international exposure. We need to keep this in mind when computing exposure of portfolio to foreign markets.
Of course it wise to have things like VXUS, VGK, VWO in addition to multinational US Companies.
|
|
|
04-20-2015, 02:08 PM
|
#25
|
Confused about dryer sheets
Join Date: Mar 2015
Posts: 7
|
I've thought that there is a big rotation going on and while the US remains an economic superpower, for the last 20+ years and for the foreseeable future the rest of the world will be catching up. I've been 50% international for as long as I've been in index funds, and will continue to be until something convinces me to change. I don't think it matters so much what percentage you pick, just pick one and stick to it (rebalance) and don't change based on short term guesses, or you will probably be wrong.
|
|
|
04-20-2015, 02:13 PM
|
#26
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,364
|
I was curious as to how the changed recommendation compares to the global equity allocation and did the following analysis comparing 70/30 and 60/40 mixes of Total Stock/Total International Stock to the Total World fund.
A 51.7/48.3 mix gets one to Total World, so it seems that Vanguard is simply looking to move its target date portfolios closer to the global market composition and is bridging half of the current difference.
As for me, I'll probably transition slowly to a higher international allocation.
| Total World | | Total Stock | Total Int'l | | Current 70/30 | Diff from Total World | | New 60/40 | Diff from Total World | United States | 51.7% | | 100.0% | | | 70.0% | 18.3% | | 60.0% | 8.3% | Japan | 8.1% | | | 16.8% | | 5.0% | -3.1% | | 6.7% | -1.4% | United Kingdom | 6.9% | | | 14.3% | | 4.3% | -2.6% | | 5.7% | -1.2% | Canada | 3.2% | | | 6.7% | | 2.0% | -1.2% | | 2.7% | -0.5% | France | 3.0% | | | 6.1% | | 1.8% | -1.2% | | 2.4% | -0.6% | Germany | 3.1% | | | 6.3% | | 1.9% | -1.2% | | 2.5% | -0.6% | Switzerland | 3.0% | | | 6.1% | | 1.8% | -1.2% | | 2.4% | -0.6% | Australia | 2.5% | | | 5.1% | | 1.5% | -1.0% | | 2.0% | -0.5% | China | 2.2% | | | 4.7% | | 1.4% | -0.8% | | 1.9% | -0.3% | Korea | 1.5% | | | 3.2% | | 1.0% | -0.5% | | 1.3% | -0.2% | Taiwan | 1.5% | | | 3.1% | | 0.9% | -0.6% | | 1.2% | -0.3% | Hong Kong | 1.3% | | | 2.6% | | 0.8% | -0.5% | | 1.0% | -0.3% | India | 1.1% | | | 2.3% | | 0.7% | -0.4% | | 0.9% | -0.2% | Spain | 1.1% | | | 2.3% | | 0.7% | -0.4% | | 0.9% | -0.2% | Sweden | 1.1% | | | 2.2% | | 0.7% | -0.4% | | 0.9% | -0.2% | Netherlands | 0.9% | | | 2.0% | | 0.6% | -0.3% | | 0.8% | -0.1% | Italy | 0.9% | | | 1.8% | | 0.5% | -0.4% | | 0.7% | -0.2% | South Africa | 0.8% | | | 1.7% | | 0.5% | -0.3% | | 0.7% | -0.1% | Brazil | 0.7% | | | 1.5% | | 0.5% | -0.3% | | 0.6% | -0.1% | Denmark | 0.6% | | | 1.2% | | 0.4% | -0.2% | | 0.5% | -0.1% | Belgium | 0.5% | | | 1.0% | | 0.3% | -0.2% | | 0.4% | -0.1% | Mexico | 0.5% | | | 0.9% | | 0.3% | -0.2% | | 0.4% | -0.1% | Singapore | 0.5% | | | 1.1% | | 0.3% | -0.2% | | 0.4% | -0.1% | Finland | 0.3% | | | 0.7% | | 0.2% | -0.1% | | 0.3% | 0.0% | Malaysia | 0.4% | | | 0.9% | | 0.3% | -0.1% | | 0.4% | 0.0% | Indonesia | 0.3% | | | 0.6% | | 0.2% | -0.1% | | 0.2% | -0.1% | Norway | 0.3% | | | 0.5% | | 0.2% | -0.2% | | 0.2% | -0.1% | Russia | 0.3% | | | 0.7% | | 0.2% | -0.1% | | 0.3% | 0.0% | Thailand | 0.3% | | | 0.6% | | 0.2% | -0.1% | | 0.2% | -0.1% | Israel | 0.2% | | | 0.5% | | 0.2% | -0.1% | | 0.2% | 0.0% | Philippines | 0.2% | | | 0.4% | | 0.1% | -0.1% | | 0.2% | 0.0% | Poland | 0.2% | | | 0.3% | | 0.1% | -0.1% | | 0.1% | -0.1% | Turkey | 0.1% | | | 0.3% | | 0.1% | 0.0% | | 0.1% | 0.0% | Austria | 0.1% | | | 0.2% | | 0.1% | 0.0% | | 0.1% | 0.0% | Chile | 0.1% | | | 0.3% | | 0.1% | 0.0% | | 0.1% | 0.0% | Colombia | 0.1% | | | 0.1% | | 0.0% | -0.1% | | 0.0% | -0.1% | Egypt | 0.0% | | | 0.1% | | 0.0% | 0.0% | | 0.0% | 0.0% | Ireland | 0.1% | | | 0.2% | | 0.1% | 0.0% | | 0.1% | 0.0% | New Zealand | 0.1% | | | 0.2% | | 0.1% | 0.0% | | 0.1% | 0.0% | Portugal | 0.1% | | | 0.1% | | 0.0% | -0.1% | | 0.0% | -0.1% | United Arab Emirates | 0.1% | | | 0.2% | | 0.1% | 0.0% | | 0.1% | 0.0% | Czech Republic | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | Greece | 0.0% | | | 0.1% | | 0.0% | 0.0% | | 0.0% | 0.0% | Hungary | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | Morocco | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | Other | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | Peru | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | Virgin Islands British | 0.0% | | | 0.0% | | 0.0% | 0.0% | | 0.0% | 0.0% | | | | | | | | | | | | | 100.0% | | 100.0% | 100.0% | | 100.0% | 0.0% | | 100.0% | 0.0% |
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
04-20-2015, 02:35 PM
|
#27
|
gone traveling
Join Date: Sep 2013
Posts: 1,248
|
http://www.econ.uniurb.it/materiale/..._optimists.pdf
Over last 100 plus years only Sweden, South Africa and Australia beat US markets. So personally I will remain overweight on US companies. US together with Canada, Australia and Denmark are 4 markets that always posted positive returns over any period of any 20 years.
Austria for example had 100 year period of negative real return.
30% international exposure looks reasonable to me especially in light of getting another 10% plus via US Multinationals.
But Zerman is right. Pick allocation and stick with it.
|
|
|
04-20-2015, 02:47 PM
|
#28
|
Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
|
Nice stats from:
Market Capitalization | World Federation of Exchanges
US markets (Nasdaq, NYSE, American SE) had 48% of the total listed market cap in the world at end of 2002.
By end of 2010 it dropped down to 30%.
Most of the shift seems to come from Asia growing faster than the US.
[Edit] Not sure to what extent access is a factor here though - used to be not even possible to buy Chinese stocks, now it's loosening up.
|
|
|
04-20-2015, 02:49 PM
|
#29
|
Moderator
Join Date: Jul 2010
Posts: 7,940
|
FWIW, DH and I today had our annual chat with our FA (who manages a small amount of our investments so that if something happens to me, DH has someone to talk with about investments in general and/or have him take over more of the responsibility - at least until DS is in a place to do that).
He is increasing our international position also for just the same reasons as mentioned above.
__________________
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
----------------------------------
ER'd Oct. 2010 at 53. Life is good.
|
|
|
04-20-2015, 02:51 PM
|
#30
|
gone traveling
Join Date: Sep 2013
Posts: 1,248
|
Quote:
Originally Posted by Totoro
Nice stats from:
Market Capitalization | World Federation of Exchanges
US markets (Nasdaq, NYSE, American SE) had 48% of the total listed market cap in the world at end of 2002.
By end of 2010 it dropped down to 30%.
Most of the shift seems to come from Asia growing faster than the US.
[Edit] Not sure to what extent access is a factor here though - used to be not even possible to buy Chinese stocks, now it's loosening up.
|
A lot changed between 2010 and 2015
The markets overreact on short term bases.
|
|
|
04-20-2015, 03:09 PM
|
#31
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
|
As a (mostly) indexer, I count on the market to "know" all the factors that should determine a stock's price, and I think it does a pretty good job over the long haul.
But, when we go to the international market, there are factors that cause equities to not always be "properly" valued. For example, in some cases the population of a country can only invest in their "native" equities, and this could cause them to be priced higher than they would be on a truly open world market. Also, governments can manipulate their currencies to affect the effective price I'd pay when I spend my US dollars. Some nations have poor accounting rules/enforcement practices and other factors that can make it more difficult for investors to even determine a proper price for equities. For these and many other factors, I'm not entirely comfortable in adjusting my portfolio to match world equity valuations. I have foreign exposure, but not 40% of my equities.
|
|
|
04-21-2015, 01:32 AM
|
#32
|
Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
|
Quote:
Originally Posted by eta2020
A lot changed between 2010 and 2015
The markets overreact on short term bases.
|
You are right, thanks for pointing that out. US share (Nasdaq + NYSE) is around 40% right now.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|