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-   -   What % do you hold in international, and why? (https://www.early-retirement.org/forums/f28/what-do-you-hold-in-international-and-why-33094.html)

simple girl 02-03-2008 10:33 AM

What % do you hold in international, and why?
 
Please indicate whether the % is of your whole portfolio (i.e. cash, bond, stock) or is just of the stock portion.

We currently have ~15% international (of total portfolio). This includes total international and emerging markets funds.

We are thinking of increasing our exposure but would like to see other's reasons for either holding less or more.

Still actively contributing with retirement hopefully 5-10 years away(overall asset allocation 73% stock, 18% bond, 9% cash).

Thanks!!

walkinwood 02-03-2008 10:39 AM

I have 20% in International stock - large value.

I think the exposure is essential given the global economy we live in. I think my 'real' exposure is higher since a lot of US companies are global and derive a significant portion of their revenues and profits outside the US.

I want to include Emerging Markets in my portfolio, but am waiting for an opportune moment to do so. It will be 5% of my portfolio. I haven't decided if I will reduce my current allocation to international-large-value to accommodate it, or reduce some other asset allocation(s).

HFWR 02-03-2008 10:54 AM

VGK - 10%

Quote:

The investment seeks to track the performance of the MSCI Europe index. The fund seeks to replicate the performance of the index, a market-cap-weighted index of approximately 603 stocks in 16 European countries, through portfolio optimization, a statistical sampling technique. It intends to remain fully invested in common stocks.
VPL - 10%

Quote:

The investment seeks to track the performance of the MSCI Pacific index. The fund seeks to replicate performance of the MSCI Pacific index, a market-capitalization weighted index of approximately 562 stocks in Australia, Japan, Hong Kong, New Zealand, and Singapore, through portfolio optimization, a statistical sampling technique. It's policy is to remain fully invested in common stocks.
VWO - 10%

Quote:

The investment seeks to track the performance of the MSCI Emerging Markets index. The fund employs a passively managed investment approach by investing all or substantially all of its assets in a representative sample of the common stocks included in the MSCI Emerging Markets index. This index includes approximately 840 common stocks of companies located in emerging markets around the world.
Why? For diversification, and because my bunion tells me that the USA is not the only story...

Meadbh 02-03-2008 11:03 AM

Definition of international = outside one's home country.
Since I live in Canada I consider US investments to be international.
% of total NW: 29%
% of securities: 32% and increasing
Includes International Value and International Growth funds and Venture Capital.
About 1/3 of my international exposure is in the US.
Why? because it's common sense to diversify between economies. Albeit globalization is smoothing the variability in international finance.

megacorp-firee 02-03-2008 11:10 AM

I have 17% in Int'l fund, 5% is in Emerging fund, 3% European fund, for a total of 25% of my portfolio.
I feel that the rest of the world is going to be growing faster than the US in the coming years.
I am still weighted a little bit more in US stocks - 30%. 5% in REITs rounds out the equity portion of my portfolio.

audreyh1 02-03-2008 11:10 AM

I hold about 21% of equities in International across all capitalizations. Sometimes I wonder if this should be higher.

But I also hold have a good chunk of Large Cap US companies, and those companies do a huge % in international sales (some > 50%), so I consider my large cap allocation to also have significant international exposure.

I have a small international bond exposure through FSCIX, a multi-sector bond fund.
I have some international REIT exposure through TAREX.

Why? same as Meadbh.

Audrey

Ed_The_Gypsy 02-03-2008 11:25 AM

My target is 50% international equities. Today it is 49.2% because I am not anal about rebalancing:
9.6% (target 10%) in Vanguard Emerging Markets,
9% (target 10%) in Matthews Asian Growth and Income,
30.6% (target 30%) in Vanguard Total International.
This is as fine as I want to slice-and-dice international.

William Bernstein Efficient Frontier convinced me that some international reduced volatility and improved returns.
Paul Merriman, FundAdvice.com - Articles, and Less Antman, Personal Financial Planning - Message Board - Yuku

convinced me that 50/50 US/international was the best mix.

Having said that, John P. Greaney, The Retire Early Home Page. , the pioneer who woke me up to reality, does not care for anything international, having seen the industrial world outside the US firsthand.

You pays your money and you takes your choice.

Shredder 02-03-2008 11:30 AM

% of total port is 22% of the stock portion 30 something %. (60/40) I believe the US/bush wars are having and will have a even larger effect at some point. And because of that and general diversification it makes sense.
I'm equal in Vanguard's international value and international growth, they provide large and small in one fund in seemingly safe amounts, and are my only non-index funds, BTW, and have been good to me in recent years....shredder

Marquette 02-03-2008 11:31 AM

~ 40% US, 30% international

edit: and 35% of the us is either total stock market or large-cap. so there's significant global exposure there as well (the other 5% is small-cap value)

FIREd 02-03-2008 11:48 AM

34% of equity portfolio is international (Europe, Japan, Emerging).
33% of bond portfolio is international.
About 40% of cash is international.

Notmuchlonger 02-03-2008 11:51 AM

75/25 stock/fixed income aa

55% US 45% Int stocks

Its a global economy. I buy into being globally diversified. 10% of INT is EM the rest is a Global Index fund.

2soon2tell 02-03-2008 11:56 AM

50 % International Equities - Large, Small and Emerging Markets including China and the rest of Asia.

33% International FI - Unhedged bond fund

Mavourneen 02-03-2008 11:59 AM

30% of my stock allocation is international which translates to 18% of my total portfolio (based on 60/40). I hold my international position for two reasons: 1) to capture some growth outside the US, and 2) as somewhat of a hedge against a crappy dollar. Most of my intl allocation is in a broadbased fund but I do have exposure to emerging markets.

Nords 02-03-2008 12:15 PM

21% of our total ER portfolio is in PowerShares International Dividend ETF (PID) and another 2% is in Tate & Lyle PLC (TATYY, makers of Splenda).

The dollar's still dropping and international markets are growing faster. We chose PID because it's derived from Mergent's dividend achievers index, which seems to be about the only truth of international financial reporting. TATYY is paying a 5% dividend on our purchase price, too.

CyclingInvestor 02-03-2008 12:30 PM

0%. I invest in individual stocks, and my analysis is dependant upon financial
histories of the stocks. Financial reporting standards of non-US stocks (except
the UK) is not up to US standards - at least not as of a few years ago. I get
foreign exposure by owning stock in companies with large international
presences - PG, JNJ, GE, etc.

mathjak107 02-03-2008 12:31 PM

about 10%. with the dollar having taken its huge tumble and all of our growth being dependent on each other from the looks of the market action i see no reason to introduce another variable into my mix, which way is the dollar headed from here. looks like when anyone tanks we all hold hands

fidelity total equity income fund ftiex

ishares international dividend achievers pid

LOL! 02-03-2008 02:02 PM

The DFA boys and those who sort of follow them like Paul Merriman FundAdvice.com - Home , and Frank Armstrong Investment Strategies for the 21st Century, by Frank Armstrong and the IFA folks Index Funds | DFA Funds Approved Advisor - Dimensional Fund Advisors Approved seem to have portfolios that have half the equity in foreign holdings. So that's what we do. We have 60% equities, so 30% of all assets are foreign equities. And those are split about 55% large cap, 45% mid/small cap.

mb 02-03-2008 02:04 PM

Quote:

Originally Posted by CyclingInvestor (Post 610876)
0%. I invest in individual stocks, and my analysis is dependant upon financial
histories of the stocks. Financial reporting standards of non-US stocks (except
the UK) is not up to US standards - at least not as of a few years ago. I get
foreign exposure by owning stock in companies with large international
presences - PG, JNJ, GE, etc.

Is this still true for the large European and Japanese ADRs?

mb 02-03-2008 02:38 PM

  • 40% of Equity exposure is International
  • 30% of International is Emerging Markets
I have started to build a position in GIM (international bonds) but it is still less than 1% of portfolio.

I have started looking at DLS and DGS for international small cap exposure but haven't bought any yet. Anyone have any opinions on them or other small cap international plays?

Reasons: Same as cited above. Diversification away from the US market. Potential for higher growth in emerging markets.

Jim Jubak at MSN Money has a recent column suggesting the possibility that the US markets could be following in the path of the Japanese equities and RE markets, i.e. a long, slow, painful down/sideways market. I try to think of these sort of events in term of probability. I don't think that it is extremely likely but I think that there is say a 10-20% probability that the US market could go sideway for the next 10-15 years.

Think of what happened if you were Japanese and REed in 1990 with all of your assets in the Japanese market. Now think about how much better of you would be if you had half in non-Japanese equities. I think that case study alone is a sufficiently strong argument for international exposure.

Not to make this a political thread but the events of the last 7 years or so have greatly reinforced my opinion of the possible benefits for international exposure.

MB

unclemick 02-03-2008 03:09 PM

I have Target Retirement 2015 for real money - thus holding International cause they do. As to why they hold the % they do - I haven't a clue - and suspect THEY DON"T EITHER!! They pulled an amount out out of you know where - and called it based on experience/common sense or whatever. I suspect there is a 'mythical composite American Investor' they have in mind with an exact 86.3 lifespan like mine(tongue in cheek).

Sooooo - as long as I am somewhere near Kansas and the yellow brick road - I will defer to Vanguard. P.S. - I went to AAII meetings in the 80's/early 90's and was maybe 30-40% International range when it was in vogue.

After forty years of reading stupid books, I don't think anybody has a clue of how to 'properly' select asset classes.

Overstated - but I would like to see the academic theory - as to why one should hold 'an whole Earth cap weighted stock/fixed income portfolio' in the accumulation or distribution phase.

Oh Yeah - I do believe the Pats have a good football team.

Should I put more distance between me and Kansas - my portfolio would change dramatically - to what I'm not sure but the fixed would be the first to get some changed to local currency.

Hmmm - in contrast, don't Billy and Akaisha hold a 500Index type portfolio and only convert cash they need??

Old, blockheaded and opinionated - but I'll be the first to admit after forty years of investing I haven't got a clue.

heh heh heh - :coolsmiley: Do know my current portfolio yield is 3% and can say psssst - Wellesley! ;D.

And yes the Pats have a good football team.


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