Spanky
Thinks s/he gets paid by the post
Only when you have no equity (or significant) holdings.
international allocation between europe and pacific
- Thread starter tulak
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Lsbcal
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks for bringing this up. My tolerance for risk is higher than normal and for the time being, I'm comfortable being 100% allocated in equities. And personally, I would love a great market drop - who doesn't like a sale?
We are currently saving around 30-40k per year and are both early 30's. I suspect around 40 we'll start adding FI and gradually increase the FI allocation as we get closer to retirement and have - hopefully - a bigger nest egg.
At your age I didn't have much in FI either. The current market doesn't seem widely overpriced but I'm not really very good at identifying toppy areas. Leaving a little in FI gives one the ammunition to really take advantage of major market declines. On the other hand, we've just had a modest decline so it's clearly not the top of a bull market. Good luck.
Les
That's part of it, but I believe the other factor is if you're still accumlating or not. We're currently in 200k range and going down to 150k or so doesn't bother me much. In the end, it's money we don't need now and I'm sure within our time frame it will come back (25-30 years).
I also took a look at adding a total bond fund at 10% and based on Simba's worksheet looking at past data, it really doesn't change the outcome by much. For those that are curious, adding the bond fund decreases CAGR by about .3% and standard deviation by 1.3%. If equity returns in the future are less than in the past, as many suspect, then the difference should be even less. It'll take awhile before I get this allocation in place, because I'm overweight in the 401k, but I think I might plan on adding the total bond fund as I start allocating to other classes.
Thanks again for all the help.
The numbers are higher on morningstars x-ray for dodfx:
U.S. & Canada 6.86
I'm a bit skeptical using morningstar sometimes. In this case, I have more faith in your numbers, since they come from the dodge and cox website.
I decided that I'd probably end up going with the ishares eafe value (efv) instead of the vanguard fund. According to morningstar, it has a significantly higher tilt towards value, even though I'd like to know the region breakdown - morningstar is showing 50% not classified. I've seen that with some of the Vanguard ETF's, but unlike Vanguard, I couldn't find the region breakdown for efv on the ishares site.
- kiki
twaddle
Thinks s/he gets paid by the post
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If you're going to base your allocation on a backtesting spreadsheet, then you should definitely be 100% emerging markets. 
If you're going to base your allocation on a backtesting spreadsheet, then you should definitely be 100% emerging markets.
Heh, that would be an interesting ride. Hang on tight!
I just punched a 100% EM into the spreadsheet, and it's actually not that bad on a year to year basis. The swings are definitely greater, but the bad years aren't much worse than the slice-and-dice portfolio I have above, excluding 97, 98, and 2000. And from 72-06, a few bad year difference isn't that bad.
But it's definitely not an investment option that I'd choose...
