Geopolitical risk doesn't matter. It's all priced in. The fact that some countries are worse to do business in than others isn't an insight that the market hasn't figured out, it's one of the most obvious things about stocks like Gazprom, Saudi Aramco, and Alibaba. Moreover, foreign stocks may outperform because of perceived geopolitical risk, we don't know if the market is overpricing or underpricing geopolitical risk. Diversification solves this problem since you don't go all in on the US never having any geopolitical risk. 40% of the geopoltical risk you mentioned is spread across dozens of countries while 60% is just one country with "zero" political risk.Rikaku wrote: ↑Tue May 11, 2021 5:44 pmNegligible is subjective. I don’t consider an expense ratio 2.6x more expensive to be negligee , on top of the foreign taxes if held in a tax advantage account.Thesaints wrote: ↑Tue May 11, 2021 1:02 pmYou can invest international with <0.10% ER (VXUS). At that point, 0.03% or 0.08% doesn't make a difference. 2% over 40 years is absolutely nothing compared to the stock market volatility.
China + Russia share of market capitalization is less than 5%. US + Canada is 60%. Basically, negligible added risk on a capitalization based index.
I see a lot more risk in leaving them out.
Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
Why foreign stocks?
Re: Why foreign stocks?
Last edited by scout1 on Tue May 11, 2021 6:10 pm, edited 1 time in total.
Re: Why foreign stocks?
Rikaku wrote: ↑Tue May 11, 2021 5:44 pmNegligible is subjective. I don’t consider an expense ratio 2.6x more expensive to be negligible , on top of the foreign taxes if held in a tax advantaged account.Thesaints wrote: ↑Tue May 11, 2021 1:02 pmYou can invest international with <0.10% ER (VXUS). At that point, 0.03% or 0.08% doesn't make a difference. 2% over 40 years is absolutely nothing compared to the stock market volatility.
China + Russia share of market capitalization is less than 5%. US + Canada is 60%. Basically, negligible added risk on a capitalization based index.
I see a lot more risk in leaving them out.
Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
Re: Why foreign stocks?
Rikaku wrote: ↑Tue May 11, 2021 6:10 pmRikaku wrote: ↑Tue May 11, 2021 5:44 pmNegligible is subjective. I don’t consider an expense ratio 2.6x more expensive to be negligible , on top of the foreign taxes if held in a tax advantaged account. And your initial statement was that international and US are equal in expense, that claim is false; doesn’t matter if you think it’s a small difference, the difference still exists and international is still unquestionably more expensive.Thesaints wrote: ↑Tue May 11, 2021 1:02 pmYou can invest international with <0.10% ER (VXUS). At that point, 0.03% or 0.08% doesn't make a difference. 2% over 40 years is absolutely nothing compared to the stock market volatility.
China + Russia share of market capitalization is less than 5%. US + Canada is 60%. Basically, negligible added risk on a capitalization based index.
I see a lot more risk in leaving them out.
Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
Re: Why foreign stocks?
When dealing with very small numbers it is very easy to get 10x ratios, which are meaningless anyway. I wrote that the 0.05% differential between domestic and ex-US stocks amounts to 2% over 40 years. It is a difference that will be invisible in the noise.
Yes, but three quarters of that 40% is developed markets, which have the same geopolitical risk as the US.Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
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Re: Why foreign stocks?
How do you know that "it's all priced in"?scout1 wrote: ↑Tue May 11, 2021 6:09 pmGeopolitical risk doesn't matter. It's all priced in. The fact that some countries are worse to do business in than others isn't an insight that the market hasn't figured out, it's one of the most obvious things about stocks like Gazprom, Saudi Aramco, and Alibaba. . . .
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: Why foreign stocks?
Is there more geopolitical risk in Switzerland, or in the US ?
Re: Why foreign stocks?
Starting with an assumption that markets are reasonably efficient seems more reasonable than the opposite assumption to me. YMMV.ruralavalon wrote: ↑Tue May 11, 2021 6:34 pmHow do you know that "it's all priced in"?scout1 wrote: ↑Tue May 11, 2021 6:09 pmGeopolitical risk doesn't matter. It's all priced in. The fact that some countries are worse to do business in than others isn't an insight that the market hasn't figured out, it's one of the most obvious things about stocks like Gazprom, Saudi Aramco, and Alibaba. . . .
Re: Why foreign stocks?
Yeah "Costs Matter" is certainly true. However when it is a handful of basis points it isn't really a material factor in making a choice. At least to me. .07% difference doesn't make me avoid a major asset class. If you make your investment allocation choices based on such small (in magnitude) differences you prioritize diversification differently than I do I guess.
The foreign tax credit if held in tax advantaged or the higher dividend yield if held in taxable may bother some people I guess.
Re: Why foreign stocks?
I don’t, but I would need to know in which direction it’s not “all priced in” in order to make an active bet. I don’t know if geopolitical risk is underpriced or overpriced so i’m stuck with a diversified portfolio.ruralavalon wrote: ↑Tue May 11, 2021 6:34 pmHow do you know that "it's all priced in"?scout1 wrote: ↑Tue May 11, 2021 6:09 pmGeopolitical risk doesn't matter. It's all priced in. The fact that some countries are worse to do business in than others isn't an insight that the market hasn't figured out, it's one of the most obvious things about stocks like Gazprom, Saudi Aramco, and Alibaba. . . .
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Re: Why foreign stocks?
Why foreign stocks?
Because they are great for tax loss harvesting
Because they are great for tax loss harvesting
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Re: Why foreign stocks?
International stocks, over the long run, historically have returned roughly what US equities have returned. This means that while in the short run, you might have an underperformance or overperformance due to having international stocks, in the long run, it is *mostly* a volatility and risk reduction strategy. US stocks and international stocks aren't perfected correlated, therefore on average it should decrease your volatility. Also, it is a risk reduction strategy with respect to having a Japan lost 30 years market in your home market.UpperNwGuy wrote: ↑Mon May 10, 2021 1:03 pmHow much diversification is enough diversification? And at what point does additional diversification start to produce diminishing returns?
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Re: Why foreign stocks?
You are correct! S&P 500 companies earn about 50% of their profits overseas! There is enough exposure.Gaston wrote: ↑Mon May 10, 2021 12:55 pm Educate me pls. I own an S&P 500 index fund. Many of the companies in the index, such as Apple, have a large proportion of international sales. So by owning an S&P 500 index fund, I feel I already have a significant (perhaps 30%) international exposure. So what benefit is there to also own foreign stocks or an international equity fund? Thx.
Jack Bogle and Warren Buffett have said simply own Total Stock or S&P 500 and Total Bond.
International investments have been bad. Jack Bogle pointed out that since 1994 international has returned a cumulative 230%. Ok not bad. But then US has returned over 700%. Now that gap is even wider.
Keep investing simple.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
So sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Why foreign stocks?
Yep, performance chasing. Best boglehead practices anyone?abuss368 wrote: ↑Tue May 11, 2021 8:54 pmSo sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
Re: Why foreign stocks?
Is this true? I have been under the impression that US equities have returned dramatically more over the long run than ex-US equities.Soon2BXProgrammer wrote: ↑Tue May 11, 2021 8:41 pm International stocks, over the long run, historically have returned roughly what US equities have returned.
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Re: Why foreign stocks?
They've returned dramatically more over the last 10 years or so. That makes it look like a lot more over 20 and 30 years. But not 40 and 50 years. Except the backtesting sites don't go back that far.VTI wrote: ↑Tue May 11, 2021 9:26 pmIs this true? I have been under the impression that US equities have returned dramatically more over the long run than ex-US equities.Soon2BXProgrammer wrote: ↑Tue May 11, 2021 8:41 pm International stocks, over the long run, historically have returned roughly what US equities have returned.
It's like pong. Back and forth and back and forth and back and forth and you get the idea.
That's why it's a wash.
That's why Bogle said just do US. Because he knew we're all a bunch of performance chasers who will switch back and forth into highs and screw ourselves decade after decade.
That's also why global market cap that is automatically rebalanced is a good idea.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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Re: Why foreign stocks?
I agree. If that is not right, nothing else matters.ruralavalon wrote: ↑Tue May 11, 2021 11:04 amI agree.Tattarrattat wrote: ↑Mon May 10, 2021 9:16 pm Long term, US and Intl have similar returns and a fair amount of correlation with each other. Owning both will probably reduce the standard deviation of your returns a bit, but your terminal wealth accumulation over several decades is very unlikely to be significantly different going all US vs global market weight. Nobody's retirement will be made or broken by this decision. The most important factors under your control are savings rate during accumulation and spending rate during distribution. Next would be your overall equity allocation. The most important factor not under your control is luck; ie: market returns. The US vs Intl issue is not worth the amount of discussion it gets.
The much more important issues are savings rate, and equity/fixed income allocation.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
See:VTI wrote: ↑Tue May 11, 2021 9:26 pmIs this true? I have been under the impression that US equities have returned dramatically more over the long run than ex-US equities.Soon2BXProgrammer wrote: ↑Tue May 11, 2021 8:41 pm International stocks, over the long run, historically have returned roughly what US equities have returned.
https://economics.harvard.edu/files/eco ... s28533.pdf
Table VII: Real rates of return on equity and housing
Note: this is based on one of the best long term data sources we have, but it is still missing some markets. It doesn't have all equity markets in both the developed world nor emerging markets.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Re: Why foreign stocks?
I appreciate the link! Looks like there's a lot of great information in there. It's quite long—before reading the whole thing, would you mind directing me to the relevant portion?Soon2BXProgrammer wrote: ↑Tue May 11, 2021 10:51 pmSee:VTI wrote: ↑Tue May 11, 2021 9:26 pmIs this true? I have been under the impression that US equities have returned dramatically more over the long run than ex-US equities.Soon2BXProgrammer wrote: ↑Tue May 11, 2021 8:41 pm International stocks, over the long run, historically have returned roughly what US equities have returned.
https://economics.harvard.edu/files/eco ... s28533.pdf
Table VII: Real rates of return on equity and housing
Note: this is based on one of the best long term data sources we have, but it is still missing some markets. It doesn't have all equity markets in both the developed world nor emerging markets.
Also available as an Admiral™ Shares mutual fund.
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Re: Why foreign stocks?
I think its on page 39 of the pdf. (37 on the page footer). there is a table titled: "Table VII: Real rates of return on equity and housing"VTI wrote: ↑Tue May 11, 2021 11:02 pmI appreciate the link! Looks like there's a lot of great information in there. It's quite long—before reading the whole thing, would you mind directing me to the relevant portion?Soon2BXProgrammer wrote: ↑Tue May 11, 2021 10:51 pmSee:VTI wrote: ↑Tue May 11, 2021 9:26 pmIs this true? I have been under the impression that US equities have returned dramatically more over the long run than ex-US equities.Soon2BXProgrammer wrote: ↑Tue May 11, 2021 8:41 pm International stocks, over the long run, historically have returned roughly what US equities have returned.
https://economics.harvard.edu/files/eco ... s28533.pdf
Table VII: Real rates of return on equity and housing
Note: this is based on one of the best long term data sources we have, but it is still missing some markets. It doesn't have all equity markets in both the developed world nor emerging markets.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Re: Why foreign stocks?
Seems like you’re now trying to minimize and confront your original statements. Facts are there IS geopolitical risk and international IS more expensive no matter how one tries to distort reality.Thesaints wrote: ↑Tue May 11, 2021 6:15 pmWhen dealing with very small numbers it is very easy to get 10x ratios, which are meaningless anyway. I wrote that the 0.05% differential between domestic and ex-US stocks amounts to 2% over 40 years. It is a difference that will be invisible in the noise.
Yes, but three quarters of that 40% is developed markets, which have the same geopolitical risk as the US.Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
Re: Why foreign stocks?
I'd urge you to put a little more weight on the points that @Thesaints is making. On a $1 million portfolio, the difference in fees between being US only and being fully diversified internationally is about $200. No rational framework can justify using that as an excuse for excluding international stocks completely.Rikaku wrote: ↑Wed May 12, 2021 3:23 amSeems like you’re now trying to minimize and confront your original statements. Facts are there IS geopolitical risk and international IS more expensive no matter how one tries to distort reality.Thesaints wrote: ↑Tue May 11, 2021 6:15 pmWhen dealing with very small numbers it is very easy to get 10x ratios, which are meaningless anyway. I wrote that the 0.05% differential between domestic and ex-US stocks amounts to 2% over 40 years. It is a difference that will be invisible in the noise.
Yes, but three quarters of that 40% is developed markets, which have the same geopolitical risk as the US.Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
As for geopolitical risk, international diverisification REDUCES the geopolitical risk of your portfolio.
For one thing, it's not as if the US is the least risky country in the world. I don't recall a Belgian gas pipeline ever being taken down by hackers, for instance. By spreading your investments across many different geopolitical risks, the potential for any SINGLE country to cause catastrophic outcome for your portfolio is greatly diminished.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Why foreign stocks?
vineviz wrote: ↑Wed May 12, 2021 6:47 amI'd urge you to put a little more weight on the points that @Thesaints is making. On a $1 million portfolio, the difference in fees between being US only and being fully diversified internationally is about $200. No rational framework can justify using that as an excuse for excluding international stocks completely.Rikaku wrote: ↑Wed May 12, 2021 3:23 amSeems like you’re now trying to minimize and confront your original statements. Facts are there IS geopolitical risk and international IS more expensive no matter how one tries to distort reality.Thesaints wrote: ↑Tue May 11, 2021 6:15 pmWhen dealing with very small numbers it is very easy to get 10x ratios, which are meaningless anyway. I wrote that the 0.05% differential between domestic and ex-US stocks amounts to 2% over 40 years. It is a difference that will be invisible in the noise.
Yes, but three quarters of that 40% is developed markets, which have the same geopolitical risk as the US.Market share of ALL ex-US is 40% — not a small amount of geopolitical risk when it’s looked at in the aggregate.
As for geopolitical risk, international diverisification REDUCES the geopolitical risk of your portfolio.
For one thing, it's not as if the US is the least risky country in the world. I don't recall a Belgian gas pipeline ever being taken down by hackers, for instance. By spreading your investments across many different geopolitical risks, the potential for any SINGLE country to cause catastrophic outcome for your portfolio is greatly diminished.
I urge you to re-read his original statement that foreign investments are equal to US in cost - that is patently false. Regardless if you think it I a trivial amount or not, his statement is mathematically wrong.
For geopolitical risk, I cannot envision a scenario where the US had a catastrophic downturn that it does not take down the rest of the world with it. The correlation between US and international is about 99%, with international having steeper downturns and reduced upside for the past 30+ years.
Re: Why foreign stocks?
You don't have to 'envision" it: you can simply look back at history to see multiple examples of time periods when international stocks did indeed buffer the poor performance of US stocks.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Why foreign stocks?
Good morning my good friend Tony. International was up +21% in 2019, +10.6% in 2020 and +8% this year. Those are technically "gains". In the hedge fund, we don't exclude any markets and our returns speak for themselves.abuss368 wrote: ↑Tue May 11, 2021 8:54 pmSo sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Why foreign stocks?
The 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Re: Why foreign stocks?
If there's one thing I've learned from being on this board, it's that rational frameworks are much less common than emotional frameworks, and trying to use reason to counter emotional arguments overall is a losing battle.
A compelling story or line generally trumps the most rational arguments. Shopworn phrases like "when the US sneezes the world catches a cold", or "the US is the cleanest shirt in a dirty hamper".
Re: Why foreign stocks?
But that way 30-40 years ago, what's the compelling story today? All that matters is the last 30 years to Rikaku.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
Re: Why foreign stocks?
As to costs, come now. This is nitpicking. To show how silly the point is, if US cost 0.11% ER and international cost 0.04% ER would you really suggest 100% international? If not, what are you arguing about? The cost difference, while it exists, is surely not material.Rikaku wrote: ↑Wed May 12, 2021 6:58 am I urge you to re-read his original statement that foreign investments are equal to US in cost - that is patently false. Regardless if you think it I a trivial amount or not, his statement is mathematically wrong.
For geopolitical risk, I cannot envision a scenario where the US had a catastrophic downturn that it does not take down the rest of the world with it. The correlation between US and international is about 99%, with international having steeper downturns and reduced upside for the past 30+ years.
As to recency bias, yep, surely a thing. I agree with you there.
Re: Why foreign stocks?
Even 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: Why foreign stocks?
Hi Dave -Dave55 wrote: ↑Wed May 12, 2021 7:08 amGood morning my good friend Tony. International was up +21% in 2019, +10.6% in 2020 and +8% this year. Those are technically "gains". In the hedge fund, we don't exclude any markets and our returns speak for themselves.abuss368 wrote: ↑Tue May 11, 2021 8:54 pmSo sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
Dave
Ouch! You have always said you have traveled the world and want to own a piece of all companies. For you, having an allocation to international has never bothered or kept you up at right correct?
Right now REITs would keep you up correct?
Tony
Last edited by abuss368 on Wed May 12, 2021 10:11 am, edited 1 time in total.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Why foreign stocks?
Tony, I sleep much better with International. I am neutral to REIT's though, but they would not keep me up.abuss368 wrote: ↑Wed May 12, 2021 7:54 amHi Dave -Dave55 wrote: ↑Wed May 12, 2021 7:08 amGood morning my good friend Tony. International was up +21% in 2019, +10.6% in 2020 and +8% this year. Those are technically "gains". In the hedge fund, we don't exclude any markets and our returns speak for themselves.abuss368 wrote: ↑Tue May 11, 2021 8:54 pmSo sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
Dave
Ouch! You have always said you have travel the world and want to own a piece of all companies. For you, having an ally to international has never bothered or kept you up at right correct?
Right now REITs would keep you up correct?
Tony
Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Why foreign stocks?
Thanks Dave. I edited me post. Darn spell checks on iPhone!Dave55 wrote: ↑Wed May 12, 2021 8:06 amTony, I sleep much better with International. I am neutral to REIT's though, but they would not keep me up.abuss368 wrote: ↑Wed May 12, 2021 7:54 amHi Dave -Dave55 wrote: ↑Wed May 12, 2021 7:08 amGood morning my good friend Tony. International was up +21% in 2019, +10.6% in 2020 and +8% this year. Those are technically "gains". In the hedge fund, we don't exclude any markets and our returns speak for themselves.abuss368 wrote: ↑Tue May 11, 2021 8:54 pmSo sad but true! Does gains and international belong in the same sentence?Kookaburra wrote: ↑Tue May 11, 2021 8:38 pm Why foreign stocks?
Because they are great for tax loss harvesting
Tony
Dave
Ouch! You have always said you have travel the world and want to own a piece of all companies. For you, having an ally to international has never bothered or kept you up at right correct?
Right now REITs would keep you up correct?
Tony
Dave
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Why foreign stocks?
The question is "So what benefit is there to also own foreign stocks or an international equity fund?" The answer is diversification. There's no other answer. If you feel like you have enough diversification with the S&P 500, all power to you.
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Re: Why foreign stocks?
This may sound weird, but I do it because it allows me to feel comfortable with a higher ratio of equities. The more diverse my equities are, the less I care about what the markets do. If I only had US stocks, I might be more tempted to tinker and keep the ratio of equities lower for fear of being overweight in something, even if the thought is not rational. So I think in the long run I passively invest better this way. Even if the international markets underperform the rest of my life, I probably will end up doing better, because I feel comfortable with the more aggressive stock/bond ratio.
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Re: Why foreign stocks?
Why foreign stocks? Lower risk due to diversification.
Why NOT foreign stocks? Possible lower returns than US stocks alone.
With multiple asset classes the overall expected return is the weighted average of the classes, which (obviously) is lower than the asset class with the highest expected return. So, if foreign stocks have a lower expected return than US stocks, mixing the two will have a lower expected return than US stocks alone. The expected volatility (aka risk) is lower than either asset class alone.
That is the multiple haystack view.
The single haystack view is that US and foreign stocks are the same asset class, or at least asset classes with the same expected return and same volatility. They are usually treated as separate asset classes. I don't know how their expected returns and volatilities compare.
Why NOT foreign stocks? Possible lower returns than US stocks alone.
With multiple asset classes the overall expected return is the weighted average of the classes, which (obviously) is lower than the asset class with the highest expected return. So, if foreign stocks have a lower expected return than US stocks, mixing the two will have a lower expected return than US stocks alone. The expected volatility (aka risk) is lower than either asset class alone.
That is the multiple haystack view.
The single haystack view is that US and foreign stocks are the same asset class, or at least asset classes with the same expected return and same volatility. They are usually treated as separate asset classes. I don't know how their expected returns and volatilities compare.
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Re: Why foreign stocks?
Vince -vineviz wrote: ↑Wed May 12, 2021 7:40 amEven 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
During that timeframe the difference was very small. I believe a 1.5% vs 3%. $100k invested was $110k IS and perhaps $138 international (close enough). Unfortunately international has not showed up cumulative since 1986.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Why foreign stocks?
Be careful about your timeframe, these numbers matter to people hoping to retire in the next 5 to 10 years, or those starting their retirement now.abuss368 wrote: ↑Wed May 12, 2021 7:37 pmVince -vineviz wrote: ↑Wed May 12, 2021 7:40 amEven 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
During that timeframe the difference was very small. I believe a 1.5% vs 3%. $100k invested was $110k IS and perhaps $138 international (close enough). Unfortunately international has not showed up cumulative since 1986.
Tony
Portfolio 1 = Total Stock, Portfolio 2 = Total International
January 2002 to December 2009:
Portfolio 1 $100,000 $122,237 2.54%
Portfolio 2 $100,000 $186,084 8.07%
I hedge my bets. I'm not market weight, but not going to do 0% international....too risky.
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Re: Why foreign stocks?
All of your arguments are based on past performance. I suggest you read some of Jack Bogle's many excellent books, in which he advises not to rely on past performance.abuss368 wrote: ↑Wed May 12, 2021 7:37 pmVince -vineviz wrote: ↑Wed May 12, 2021 7:40 amEven 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
During that timeframe the difference was very small. I believe a 1.5% vs 3%. $100k invested was $110k IS and perhaps $138 international (close enough). Unfortunately international has not showed up cumulative since 1986.
Tony
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Re: Why foreign stocks?
Easy!Triple digit golfer wrote: ↑Wed May 12, 2021 7:44 pmAll of your arguments are based on past performance. I suggest you read some of Jack Bogle's many excellent books, in which he advises not to rely on past performance.abuss368 wrote: ↑Wed May 12, 2021 7:37 pmVince -vineviz wrote: ↑Wed May 12, 2021 7:40 amEven 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 amThe 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
During that timeframe the difference was very small. I believe a 1.5% vs 3%. $100k invested was $110k IS and perhaps $138 international (close enough). Unfortunately international has not showed up cumulative since 1986.
Tony
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
My argument has nothing to do with Japan or past performance. It's about diversification.abuss368 wrote: ↑Wed May 12, 2021 7:50 pmEasy!Triple digit golfer wrote: ↑Wed May 12, 2021 7:44 pmAll of your arguments are based on past performance. I suggest you read some of Jack Bogle's many excellent books, in which he advises not to rely on past performance.abuss368 wrote: ↑Wed May 12, 2021 7:37 pmVince -vineviz wrote: ↑Wed May 12, 2021 7:40 amEven 2002 to 2010 is a good example, and isn't so long ago that people should have forgotten about it.whereskyle wrote: ↑Wed May 12, 2021 7:09 am
The 70s and early 80s are a perfect example. Terrible performance for US stocks AND bonds. Ex-US equities impressively outperformed.
During that timeframe the difference was very small. I believe a 1.5% vs 3%. $100k invested was $110k IS and perhaps $138 international (close enough). Unfortunately international has not showed up cumulative since 1986.
Tony
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
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Re: Why foreign stocks?
My argument has nothing to do with Japan or past performance. It's about diversification.Triple digit golfer wrote: ↑Wed May 12, 2021 7:55 pm
Easy!
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
[/quote]
There is enough diversification with 3,500 stock in Total Stock and at a much lower cost.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
There is enough diversification with 3,500 stock in Total Stock and at a much lower cost.abuss368 wrote: ↑Wed May 12, 2021 7:57 pmMy argument has nothing to do with Japan or past performance. It's about diversification.Triple digit golfer wrote: ↑Wed May 12, 2021 7:55 pm
Easy!
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
Tony
[/quote]
Nope. All one country.
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Re: Why foreign stocks?
Nope. All one country.Triple digit golfer wrote: ↑Wed May 12, 2021 8:02 pmThere is enough diversification with 3,500 stock in Total Stock and at a much lower cost.abuss368 wrote: ↑Wed May 12, 2021 7:57 pmMy argument has nothing to do with Japan or past performance. It's about diversification.Triple digit golfer wrote: ↑Wed May 12, 2021 7:55 pm
Easy!
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
Tony
[/quote]
Yep. Those 3,500 stocks earn almost one half of revenue overseas.
Simplicity is the master key to financial success.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
Yep. Those 3,500 stocks earn almost one half of revenue overseas.abuss368 wrote: ↑Wed May 12, 2021 8:05 pmNope. All one country.Triple digit golfer wrote: ↑Wed May 12, 2021 8:02 pmThere is enough diversification with 3,500 stock in Total Stock and at a much lower cost.abuss368 wrote: ↑Wed May 12, 2021 7:57 pmMy argument has nothing to do with Japan or past performance. It's about diversification.Triple digit golfer wrote: ↑Wed May 12, 2021 7:55 pm
Easy!
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
Tony
Simplicity is the master key to financial success.
Tony
[/quote]
Would you please learn to quote properly? This is about the fourth time tonight you've messed it up.
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Re: Why foreign stocks?
Would you please learn to quote properly? This is about the fourth time tonight you've messed it up.Triple digit golfer wrote: ↑Wed May 12, 2021 8:05 pmYep. Those 3,500 stocks earn almost one half of revenue overseas.abuss368 wrote: ↑Wed May 12, 2021 8:05 pmNope. All one country.Triple digit golfer wrote: ↑Wed May 12, 2021 8:02 pmThere is enough diversification with 3,500 stock in Total Stock and at a much lower cost.abuss368 wrote: ↑Wed May 12, 2021 7:57 pmMy argument has nothing to do with Japan or past performance. It's about diversification.Triple digit golfer wrote: ↑Wed May 12, 2021 7:55 pm
Easy!
* your arguments for including international are based on past performance citing Japan and early 2000s. No difference there!
* If you read Mr. Bogle’s books you would be aware that not one book recommends international. Only Total Stock and Total Bond. I think you are confused and may be thinking of another investment expert perhaps?
Tony
Tony
Simplicity is the master key to financial success.
Tony
Ha!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
Simple yes. But not all investors want to invest in international. VTI is a modern marvel!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Why foreign stocks?
Yep, some investors want to chase performance. Tell us about it. When did you dump internstional to chase performance and how long after that did you start spamming the board encouraging others to do the same?
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Re: Why foreign stocks?
Simplicity is the master key to financial success. Reading Jack Bogle’s and Warren Buffett’s thoughts made it very clear!Triple digit golfer wrote: ↑Wed May 12, 2021 8:17 pm
Yep, some investors want to chase performance. Tell us about it. When did you dump internstional to chase performance and how long after that did you start spamming the board encouraging others to do the same?
Tony
John C. Bogle: “Simplicity is the master key to financial success."