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When Global Stocks Go On Sale
02-11-2016, 12:05 PM
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#1
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,518
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When Global Stocks Go On Sale
With all the threads on stock market declines, I thought this might be of interest. Ben Carlson hosts a website called "A Wealth of Common Sense". A recent entry When Global Stocks Go On Sale
His point, simply made, is that stocks around the world are down more than here in the US, on average 30%, and that usually when stock prices fall that much they are higher 1, 3 and 5 years later. His conclusion
Quote:
Using the past as our guide, it’s clear that bear markets tend to be a great time to put money to work for those who can look past short-term volatility. Long-term savers and investors should see this as an opportunity, not a crisis.
Global stocks are on sale.
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02-11-2016, 01:30 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Agreed. I've been using the strong USD to do a little overseas investment shopping.
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Retired early, traveling perpetually.
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02-11-2016, 01:30 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 1,992
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Ok, but you go first.
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02-11-2016, 02:14 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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I re-balanced into International and Emerging funds on 12/31/15. I may have to do it again if the current trend continues.
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02-11-2016, 02:50 PM
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#5
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,137
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I have an international component in my asset allocation. I rebalance periodically...
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Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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02-11-2016, 03:02 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,669
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Pumping dollars into RNWEX - American funds new world R4, via 401k biweekly.
Has been quite a while since I had to rebalance, but it appears that will need to be done.
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02-11-2016, 03:33 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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I've been getting killed in the ex-US piece of my portfolio lately. Dollar cost averaging ftw.
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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When Global Stocks Go On Sale
02-11-2016, 04:53 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
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When Global Stocks Go On Sale
I think it was a mantra a few years ago, at least from CNBC, I did invest overseas and still down BIG. I did buy some more recently but thought I was NOT being smart this morning, luckily that was a very small part of my portfolio.
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02-11-2016, 05:51 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Vanguard Total International Stock ETF VXUS has a P/E ratio of 14, and a dividend yield of 3.0%.
The Emerging Market ETF VWO has P/E of 12, and dividend yield of 3.45%.
For comparison, the US Total Market VTI has a P/E of 17, with 2.10% dividend yield.
Buy, buy, buy...
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"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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02-11-2016, 06:50 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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02-11-2016, 07:09 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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I've been buying internationals (by rebalancing mostly) for the past couple of years. Developed markets, emerging markets (in bulk!), international value. This stuff kept getting smashed.
Look at the eurozone - forex alone has us down about 30% in USD terms since the peak in ~2008.
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Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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02-11-2016, 08:17 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,183
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I live abroad and I am up to 63% international stock now -- in fact, I just bought some more today. Since most of my spending is non-dollar, it provides currency diversification -- although still not quite enough since all my bonds and my future Social Security are in dollars.
There is a free lunch aspect to Americans retired abroad -- when markets are down the dollar tends to get stronger and vice versa.
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02-11-2016, 08:19 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by FUEGO
I've been buying internationals (by rebalancing mostly) for the past couple of years. Developed markets, emerging markets (in bulk!), international value. This stuff kept getting smashed.
Look at the eurozone - forex alone has us down about 30% in USD terms since the peak in ~2008.
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It's a bear trap. I got a toe caught in there too. Waiting a bit to see if things get really messy so I can jump the rest of the way in.
This is when things get interesting. Weeeee!
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Retired early, traveling perpetually.
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02-11-2016, 08:21 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by target2019
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For the last 3 years, the orange square does not bounce as much as dribble.
Any day now... You would think that with low energy cost, developing countries would do well.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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02-11-2016, 09:14 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by Gone4Good
It's a bear trap. I got a toe caught in there too. Waiting a bit to see if things get really messy so I can jump the rest of the way in.
This is when things get interesting. Weeeee!
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If it goes down more, I'll keep rebalancing into the drop. Not much fun on the way down but lots of fun on the way up (thinking back to mid-March 2009 now!).
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Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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02-11-2016, 10:29 PM
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#16
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Quote:
Originally Posted by NW-Bound
Any day now... You would think that with low energy cost, developing countries would do well.
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Quite a few of them are pumping the oil .. Venezuela, Nigeria, Russia, Brazil.
If this level holds for a few more weeks (when I'm back in Europe) I'm reallocating cash to equities, 10% or so. Been waiting a few years for a good moment.
Then if summer comes around and there is a bigger drop, another 10%!
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02-11-2016, 10:51 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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I do not have the breakdown, but there are more oil-consuming countries than oil-producing ones, and I expect that the total stock market values of the former dwarf that of the latter. Else, the overall P/E would not be as low as it is, relative to that of the US market. And one can always buy country-specific ETFs.
By the way, Korean's small-cap Kosdaq (somewhat similar to Nasdaq) just halted trading as its index drops 8%. The country's large-cap Kospi index drops 1.5% and still trades. The P/E of the Kospi index is a mere 10.5.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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02-12-2016, 03:45 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,669
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Quote:
Originally Posted by NW-Bound
For the last 3 years, the orange square does not bounce as much as dribble.
Any day now... You would think that with low energy cost, developing countries would do well.
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Can never understand what those foreigners are saying, or I'd know what they're doing!
The orange square will bounce. Maybe you downloaded the version without years 2016-2020 filed in?
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When Global Stocks Go On Sale
02-12-2016, 05:26 AM
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#19
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gone traveling
Join Date: Oct 2007
Posts: 1,135
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When Global Stocks Go On Sale
Quote:
Originally Posted by NW-Bound
Vanguard Total International Stock ETF VXUS has a P/E ratio of 14, and a dividend yield of 3.0%.
The Emerging Market ETF VWO has P/E of 12, and dividend yield of 3.45%.
For comparison, the US Total Market VTI has a P/E of 17, with 2.10% dividend yield.
Buy, buy, buy...
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My large position of VXUS is down more than 20 percent. I'm At the upper end of my AA. Sitting and holding.
There is oil exposure in VXUS. Not to mention strong dollar.
I do like the div yield. Hence staying put.
Thought about putting another 20 percent in to go outside my normal AA ... VXUS has been anemic for a couple years.
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02-12-2016, 07:40 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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I have recently rebalanced my Mom's investments after not doing so for many years and as part of that increased the international component from what I had initially set it 10 years ago. Similarly, I increased the emerging markets in my portfolio and am buying to get to the new level. I think it will pay off in the long run but there may be some pain in the interim.
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Patience is the art of concealing your impatience.
Slow and steady wins the race.
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