Rich_by_the_Bay
Moderator Emeritus
I was paging through Bogle's book on mutual funds at Borders today. I was interested to learn that he has reservations about the 'irrational exuberance' in international investing.
Unlike many authors (Merriman for example) who are advising up to 30-50% allocation in international funds, Bogle cautions not to exceed 10% to 20%. His reasoning is only briefly discussed but it seems he fears not so much the performance risk (if any), but rather the currency risk.
Interesting red flag coming from him. Not hard to imagine China, for example, doing unanticipated things with their currency or for the dollar to do a major dance even when actual stock performance is doing OK. Wouldn't claim to understand this, but Bogle is a hard voice to ignore.
Unlike many authors (Merriman for example) who are advising up to 30-50% allocation in international funds, Bogle cautions not to exceed 10% to 20%. His reasoning is only briefly discussed but it seems he fears not so much the performance risk (if any), but rather the currency risk.
Interesting red flag coming from him. Not hard to imagine China, for example, doing unanticipated things with their currency or for the dollar to do a major dance even when actual stock performance is doing OK. Wouldn't claim to understand this, but Bogle is a hard voice to ignore.