When Global Stocks Go On Sale

[MichaelB]

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

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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[Gone4Good]

Agreed. I've been using the strong USD to do a little overseas investment shopping.

 

[NYEXPAT]

Ok, but you go first.

 

[walkinwood]

I re-balanced into International and Emerging funds on 12/31/15. I may have to do it again if the current trend continues.

 

[rodi]

I have an international component in my asset allocation. I rebalance periodically...

 

[target2019]

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.

 

[Big_Hitter]

I've been getting killed in the ex-US piece of my portfolio lately. Dollar cost averaging ftw.

 

[Fedup]

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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[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...

 

[target2019]

Emerging Markets swings high, or swings low. Follow the bouncing orange square...

Review: The Callan Periodic Table of Investment Returns 2015 | TopForeignStocks.com

 

[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.

 

[kramer]

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.

 

[Gone4Good]

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.

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!

 

[NW-Bound]

Emerging Markets swings high, or swings low. Follow the bouncing orange square...

Review: The Callan Periodic Table of Investment Returns 2015 | TopForeignStocks.com

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.

 

[FUEGO]

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!

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!).

 

[Totoro]

Any day now... You would think that with low energy cost, developing countries would do well.

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%!

 

[NW-Bound]

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.

 

[target2019]

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.

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?

 

[papadad111]

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...

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.

 

[pb4uski]

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.

 

[Gone4Good]

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!).

Can't say I don't like the upswing. But I also get a fair amount of perverse pleasure rushing in where fools fear to tread.

 

[eytonxav]

Anyone holding DODFX? I've been disappointed at how poorly this fund has performed relative to some other international funds. Active management not helping much, but I suppose its too big for them to easily make changes.

 

[MichaelB]

Anyone holding DODFX? I've been disappointed at how poorly this fund has performed relative to some other international funds. Active management not helping much, but I suppose its too big for them to easily make changes.

I used to, but concluded, like you , that they were too big. EFA was a better choice for a broad int'l fund, and also potentially more tax efficient. I also narrowed much of my developed int'l portfolio to Europe.

 

[petershk]

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.

Keep in mind that many developing countries have economies based on natural resources... and those are all getting hammered right now. It's the high tech, service and to some extend manufacturing economies that benefit from cheap oil.

Brazil, Russia, Venezuela, etc are rough shape. They want expensive oil .

China and India have their own problems.

That said I think this is the exactly why EM is a good buy right now.... if you have a 5-10 year time horizon.

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[Fedup]

Anyone holding DODFX? I've been disappointed at how poorly this fund has performed relative to some other international funds. Active management not helping much, but I suppose its too big for them to easily make changes.

I sold it back in 2007.


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