Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Tweaking International Allocation
Old 08-02-2005, 10:37 AM   #1
Recycles dryer sheets
 
Join Date: Nov 2003
Location: Charlotte
Posts: 360
Tweaking International Allocation

Have been settled in my retirement asset allocation for a while without changing it!* It is nice to realize you only need to make re-balancing and funding decisions once a year.

I have been thinking some about our current international allocation however.* Currently have 10% of total portfolio in international stocks, equally distributed between Vanguard's European, Pacific and Emerging Markets indices.* *Thoughts are that 1) Pacific index is mostly Japan and that is a lot of single country exposure,* 2) these indices are mostly growth oriented and 3) having at least some actively managed international could be a plus.* Could address all of these issues by swapping Europe and Pacific for Developed Markets Index (a cap weighted combination of Europe and Pacific) and Vanguard's International Value.* Any thoughts on this as an international allocation or other approaches?
Thanks, Bill
WilliamG is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Tweaking International Allocation
Old 08-02-2005, 11:26 AM   #2
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: Tweaking International Allocation

Hi William:

Quote:
1) Pacific index is mostly Japan and that is a lot of single country exposure
Well, you've got 90% of your other stocks in one country [The USA]. Seriously though, currently, Japan only represents 2.43% [10% * 1/3 * 73%] of your equities. In addition its not like VPACX isn't diversified by company and sector, or at least as much as many US stock funds.

Quote:
2) these indices are mostly growth oriented
True, as are they "large" oriented like TSM.

Quote:
3) having at least some actively managed international could be a plus.
that is one way to look at it I suppose. You could also look at #2 and #3 and say, "I want more int'l value and int'l small exposure, so I'd need to use actively managed funds to do so." As long as those funds are fairly passive [low turnover], and low cost, and run for the shareholders, not the managers and owners, probably nothing wrong with that.

Given this, however, I think I'd rather get my small exposure in the US where I only have to pay around 0.20%, rather than paying north of 1.00% for int'l small. Also, Vanguard's Int'l value isn't really all that much more valuey than Vanguard's developed market index, if we're using p/b to measure valuey-ness. By comparison, DFA's Int'l value has a p/b around 1.1, compared to 1.7 for VTRIX and 1.9 for VDMIX.

btw - I haven't seen anything to support the idea that active management works any better or worse for int'l stocks than it does for US stocks.

- Alec
ats5g is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Asset Allocation: Effective but not feasible? Hillbilly FIRE and Money 20 04-28-2007 10:02 PM
International Allocation AlmostDone FIRE and Money 21 01-08-2007 01:17 PM
International Asset Allocation - Importance? veritasophia FIRE and Money 45 05-02-2006 02:46 PM
International Equity Allocation Telly FIRE and Money 14 07-14-2005 08:46 AM
International equities allocation LRAO FIRE and Money 1 04-21-2005 10:00 AM

» Quick Links

 
All times are GMT -6. The time now is 11:35 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.