Fedup
Thinks s/he gets paid by the post
Any thought on Japan? I just bought some for my HSA account. Erin Brown from CNBC alerted me to EWJ.
International stocks question
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gcgang
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EWJ-10yr return of about 1/2%. I guess they're due. Or just doo-doo.
What did Erin have to say that made you buy it?
What did Erin have to say that made you buy it?
Fedup
Thinks s/he gets paid by the post
I think she said the Nikei is going to cross 20,000. I hope that's what I've heard.
aja8888
Moderator Emeritus
If you bought it 10 years ago, you would be back to even now (less fees). The same goes for 20 years ago.
https://www.ishares.com/us/products...g3l9BAWgMaAni98P8HAQ&gclsrc=aw.ds#chartDialog
Fedup
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Good thing I never did 10 years ago. I'm asking for now though.
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Blue Collar Guy
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I decided years ago i would do 80/20 stock /bond mix. of the 80 ,50 % was small cap, 35 % sp500 and 15 % international. the international has been lagging terribly i think. i dont change it mainly because that whole reversion to the mean thing. seems like this last year its starting to outperform. in my next life its 80 % sp500/ 20% intermediate bonds . it would be 2 funds in vanguard. 1 statement easy stuff. instead i had to learn the hard way about financial advisers and what they cost me over my life time etc.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It might go up. It might go down.
If you don't want individual country risk, buy a diversified EAFE or total international market fund. If you want individual country risk, you have bought the right thing. Ignore it for five or ten years, then look to see how the bet worked out. For short time periods, you're basically sampling random noise. It might go up. It might go down.
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I actively avoid Japan with EPP.
jonat
Recycles dryer sheets
My Fidelity portfolio manager said that international stocks have been outperforming domestic stocks recently, so they have been gradually increasing our participation there.
Fedup
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It's my moon shot account. Even if I earn 1-2% in this account, it's still a lot higher than what I've been earning in the last 6 years. It's a small account so I've totally neglected until now.
Fedup
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So I bring back this thread to ask a question about ETFs, why so many? I can't understand the difference. I tried google them on Bogglehead but it's not helpful for my understanding.
So what's the difference between VGK vs VEA. Then we have VEU and VSS. Before anybody tell me just buy VXUS, I'm just trying to understand the difference.
So what's the difference between VGK vs VEA. Then we have VEU and VSS. Before anybody tell me just buy VXUS, I'm just trying to understand the difference.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Opinions:
Why so many? Human greed. Now that the word "index" is hot, every fund company wants to have as many funds called "index" as they can. And since the concept of passive investing has become so horribly distorted (for example, claiming that sector "index" funds have been blessed by the priests of the church of Fama and French) there is plenty of opportunity for the hucksters to fleece the naive.
What's the difference? IMO ETFs were created to give the brokers a tool to keep customers from moving their money to the Vanguards and the Fidelities. Also as a tool to encourage people to generate trading commissions. There is no overwhelming reason to choose ETFs though there can be some very minor ones relating to fees and tax efficiency. There is one negative, though, that IMO may be significant at some point: Shares in ETFs are created and liquidated by third parties called "authorized participants." These parties apparently make a small amount by arbitraging during the process. A problem may arise, though, during major market downward moves: With the underlying shares moving quickly in value, the authorized participants may move to the sidelines rather than risk buying and liquidating EFT shares, thus destroying ETF liquidity. IF this happens, it might not be pretty -- but the "IF" is a big one. Conventional mutual funds will also have problems in a fast moving market but the friction introduced by once-a-day pricing and trading plus the absence of third-party players seems to me to make the situation less risky. Since I don't day trade my mutual fund positions, I can avoid this hypothetical risk by emphasizing conventional mutual funds in my portfolio.
Oh, and the idea that all ETFs are index funds is just flat wrong. Conflating the two is a mark of ignorance. There are actively managed ETFs.
IMO the lessons from Markowitz, Sharpe, Fama, and French are that investors should hold a broad, diversified portfolio such as an inexpensive single total market fund or a two-fund combination of a US total market fund and an international total market fund. So we really need only three funds, not ten thousand. Add broad market small cap and value funds for people who want to tilt their portfolios a little in recognition of the Fama/French three factor model, and we are up to five funds with our investing needs fully met. Add two more if you want to separate US and international specialty funds.
OK. Let the firebombs begin.
VSS = Small-cap ex-US; VEU = All-cap ex-US (so also big cap).
VGK = Europe; VEA = Europe + Canada + Pacific
If you google "vanguard personal" + ticker, first hit usually is the relevant profile of said funds.
Fedup
Thinks s/he gets paid by the post
Thank you. I must have done it all wrong then. I thought VEA is Europe until I noticed that VGK went up a lot more than VEA.
So to be more specific, the Pacific in VEA includes which country in the Pacific? And while I'm at it, what countries are in VWO?
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Fedup
Thinks s/he gets paid by the post
Opinions:
Why so many? Human greed. Now that the word "index" is hot, every fund company wants to have as many funds called "index" as they can. And since the concept of passive investing has become so horribly distorted (for example, claiming that sector "index" funds have been blessed by the priests of the church of Fama and French) there is plenty of opportunity for the hucksters to fleece the naive.
What's the difference? IMO ETFs were created to give the brokers a tool to keep customers from moving their money to the Vanguards and the Fidelities. Also as a tool to encourage people to generate trading commissions. There is no overwhelming reason to choose ETFs though there can be some very minor ones relating to fees and tax efficiency. There is one negative, though, that IMO may be significant at some point: Shares in ETFs are created and liquidated by third parties called "authorized participants." These parties apparently make a small amount by arbitraging during the process. A problem may arise, though, during major market downward moves: With the underlying shares moving quickly in value, the authorized participants may move to the sidelines rather than risk buying and liquidating EFT shares, thus destroying ETF liquidity. IF this happens, it might not be pretty -- but the "IF" is a big one. Conventional mutual funds will also have problems in a fast moving market but the friction introduced by once-a-day pricing and trading plus the absence of third-party players seems to me to make the situation less risky. Since I don't day trade my mutual fund positions, I can avoid this hypothetical risk by emphasizing conventional mutual funds in my portfolio.
Oh, and the idea that all ETFs are index funds is just flat wrong. Conflating the two is a mark of ignorance. There are actively managed ETFs.
IMO the lessons from Markowitz, Sharpe, Fama, and French are that investors should hold a broad, diversified portfolio such as an inexpensive single total market fund or a two-fund combination of a US total market fund and an international total market fund. So we really need only three funds, not ten thousand. Add broad market small cap and value funds for people who want to tilt their portfolios a little in recognition of the Fama/French three factor model, and we are up to five funds with our investing needs fully met. Add two more if you want to separate US and international specialty funds.
OK. Let the firebombs begin.
It's a good rant and I agree with your post. Maybe I should just by V and forget about it. I just like tinkering though.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
The Vanguard website has all sorts of details about their funds, including answers to your questions.
Fedup
Thinks s/he gets paid by the post
Thank you. I found out that VEA has 21% Japan. I didn't know that. I thought at one point I googled the equivalent ETF for VEURX mutual fund was VEA. Now I know better.
Blue Collar Guy
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I have 15 % of my equity part in international, its been a dog. But i set it and im forgetting it. The 10 years ending 12/31/2016 after fees it was 0.3 %, the sp500 was 6.9 %. yeah id call that a dog. the 5 years ending 12/31/2016 was SP500 14,7% international was 6.1 %.
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
So many ETFs, so little time. Essentially, there is competition between institutions AND there is slicing and dicing of the pie. Some say you do not need international (like Bogle).
At 20% int'l overall, we will be ok.
At 20% int'l overall, we will be ok.
FiveDriver
Full time employment: Posting here.
Here, let me add to your confusion.....
I've found this website to be helpful in sorting thru the haystack --
https://www.barchart.com/etfs-funds...erBy=percentChange&orderDir=desc&dropdown3=68
You can at least see which Geographic sectors are moving up and moving down. You can click on the ETF symbol to drill a little deeper.
I don't have any specific International holdings. I get my Intl spin from whatever the SP500 big caps generate. It is my opinion that with Interest Rates inching higher and the Dollar gaining strength, choosing the absolutely correct Intl ETF is like picking fly-poop out of the pepper shaker.
IMO, holding a broad-based Intl ETF would only dilute the overall gains.
I've found this website to be helpful in sorting thru the haystack --
https://www.barchart.com/etfs-funds...erBy=percentChange&orderDir=desc&dropdown3=68
You can at least see which Geographic sectors are moving up and moving down. You can click on the ETF symbol to drill a little deeper.
I don't have any specific International holdings. I get my Intl spin from whatever the SP500 big caps generate. It is my opinion that with Interest Rates inching higher and the Dollar gaining strength, choosing the absolutely correct Intl ETF is like picking fly-poop out of the pepper shaker.
IMO, holding a broad-based Intl ETF would only dilute the overall gains.
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Fedup
Thinks s/he gets paid by the post
Thanks all. I was only looking at Vanguard ETFs, even among them they are too many already. They are free for me to trade.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
True of all funds, not just international. The broader the fund holdings, the less important it is to find the "correct" one, other than by seeking minimum fees.
... and also dilute overall losses. This is the effect of diversification.
The academic research is clear. No one can predict the future behavior of individual stocks or sectors. So, as Fama says, "We have to hold the market portfolio." IOW, everything.
Really, Sharpe explained this to us in 1991: https://web.stanford.edu/~wfsharpe/art/active/active.htm
Here is a worthwhile way to spend 37 minutes: INVESTORS FROM THE MOON: FAMA | Top1000Funds.com
and here is a place where browsing offers high payoff: https://famafrench.dimensional.com/videos.aspx
Fedup
Thinks s/he gets paid by the post
Just YTD, VEA and VWO returns have doubled VTI. If that's fly poop, I'm happy to pick them up.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yup. Investing is easy. No fly poop involved. Just apply the Will Rogers rule: If it don't go up, don't buy it.
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