Go over to bogleheads.org and do a search on this subject. It is raised and debated often.
33% of our equities are ex-US.
Investment legends Jack Bogle and Warren Buffet have a few things in common: They embrace low fees and index investing, and millions of people look to them for investing wisdom. One other thing: When it comes to investing, both are homebodies.
Bogle dismisses international diversification. Buffett, meanwhile, says an index fund portfolio of 90 percent S&P 500 and 10 percent Treasurys is probably good enough for most investors — that's how he is recommending his wife invest. But the anti-international stance is the rare piece of investment advice over which many people dare to disagree with Bogle and Buffett.
https://www.cnbc.com/2017/04/17/a-s...-shared-by-jack-bogle-and-warren-buffett.html
Buffet? Berkshire Hathaway has investments in foreign stocks, and also direct ownership of foreign companies. Do you have a link to any comment Warren Buffet has made that discourages investment in int'l equities?Neither Buffet or Bogle are warm on International equities.
My biggest issue with adding international stocks is I wouldn't know what area of the World to invest in. I do not know enough about overseas markets to risk any significant money there. This doesn't mean it's a bad idea if one does so. It could turn out to be wonderful.
Source?
@Senator, it seems that you frequently make jingoistic comments like this. I don't know if you're just trolling for fun or if you are serious.I think many foreign countries operate on corruption and bribes. Legal or not. ..
@UnrealizedPotential you're missing a very important point here: Nobody else knows either.My biggest issue with adding international stocks is I wouldn't know what area of the World to invest in. ...
The correlation between US stocks and Int stocks is about 0.77 so it doesn't add much diversity, but it does add considerable volatility. If you want some more diversity add 2-5% GLD to a 60:40 stock bond portfolio. Bonds are .07 correlated and gld is -.04
Buffet? Berkshire Hathaway has investments in foreign stocks, and also direct ownership of foreign companies. Do you have a link to any comment Warren Buffet has made that discourages investment in int'l equities?
I included a link in the post above. Berkshire invests in many things, including international companies. Buffet does not even recommend individuals buy Berkshire Hathaway.
https://www.cnbc.com/2017/04/17/a-s...-shared-by-jack-bogle-and-warren-buffett.html
I have never seen Warren give an individual investor advice to buy international equities.
@Senator, it seems that you frequently make jingoistic comments like this. I don't know if you're just trolling for fun or if you are serious.
Re corruption, the US is ranked eighteenth from the best, beat by most of the EU, by Hong Kong, Australia, and Singapore among others. My guess is that on a cap-weighted basis the US is about average for the pack. Certainly you should not be feeling particularly holy about the US. https://www.transparency.org/news/fe...ons_index_2016
Maybe you don't travel?
I wonder if it might be a do as I say vs say what I do thing since Berkshire does have a lot of international investments and operations.
While I prefer a significant allocation to international stocks, from the data that I have seen it doesn't seem to make a drastic difference either way.
..... And it is far easier to manage a S&P ETF than reallocate and pay taxes every year strictly due to re-balancing.
The plural of "anecdote" is not "data." I gave you a link to the data.I know many people, from many international countries and many have stories about bribery. Especially Mexico.
My own mother had a green card from Mexico, so she could live there, and she had someone else use their thumbprints so she would not have to go to the office to do it herself.
Many friends from India, Iran, Pakistan, China etc. have similar stories. Probably European countries, and Japan, are better than others.
You're entitled to your own opinions of course but you are not entitled to your own facts. Can you back that statement up? Clearly the corruption index implies that your statement is false.The USA is no saint, but it is the most trusted country when it come to finances. ...
...We are basically the tallest midget; the dollar has issues but the alternatives are, at this time, worse. ...
Yes. I have seen numbers for the US as % of total world in the 45-55% range so I tend to think 50/50. Agree completely on your point that any portfolio that doesn't own everything is in fact betting on sectors.... The MSCI World has 59% US holdings (link, p. 2). So anything <41% international is basically a sector bet, and that does not even take emerging markets into account. ...
I think that one of the reasons that home country bias is not crystal clear is the argument that investing "outside" involves currency risk. It is often stated as: "My expenses are in dollars (or Euros) so that's where I should have my investments." No one knows the future of course, but I think there are reasons to expect a long-term decline in the dollar, which would argue for underweighting my home country. So a portfolio tilt designed to take advantage of currency movements might be a viable choice for some.... c) my home currency region (Eurostoxx600)
c) is probably unnecessary, as MSCI World and Eurostoxx600 are heavily correlated. But I prefer to be overweighted in equities denominated in €.
Thanks. it's a critically important point that's often forgotten in the heat of posting and, actually, not understood by some. I wish I could claim originality but I stole it from SGOTI.... @OldShooter: 'The plural of "anecdote" is not "data"' absolutely made my day.
which is why I put 15% in SCHF and let it rideMy biggest issue with adding international stocks is I wouldn't know what area of the World to invest in
I see no issue with not including international equities.
I can't seem to duplicate those numbers. What date range did you use? Also, the EFA number seems to be simply daily stock price, not total return. Not sure about the S&P number being total return, though it looks like it might be, without knowing the dates.I have had virtually no direct international equity exposure since 2012, but own a large portion of SPY and equivalents.
5 yr return for S&P 500 - 83%
5 yr return for EFA - 26.4%
(a broad int'l ETF)
I can't seem to duplicate those numbers. What date range did you use? Also, the EFA number seems to be simply daily stock price, not total return. Not sure about the S&P number being total return, though it looks like it might be, without knowing the dates.
Yeah. Thanks. Those are the total return type of numbers I was getting. One of the problems I have when researching this type of thing is making sure I am getting total return. S&P is easy: https://finance.yahoo.com/quote/^SP500TR/ but some of the others not so much. That's probably why @DrRoy's numbers were apples & oranges.Here is what Fido says about the indexes as of 10/31/2017.
I can't seem to duplicate those numbers. What date range did you use? Also, the EFA number seems to be simply daily stock price, not total return. Not sure about the S&P number being total return, though it looks like it might be, without knowing the dates.