I pointed that out because it was asked if this was just bumping the thread with old news to keep it on the front page.Taylor Larimore wrote: ↑Mon May 10, 2021 8:00 pmThe wonderful thing about Jack Bogle is that his advice is timeless!goonie wrote:That article is from 6 years ago.
Best wishes.
TaylorJack Bogle's Words of Wisdom: "I would say, go into the casino, which is what Wall Street is today. Bet on the entire stock market and then get out of the casino and never show yourself there again.”
Jack Bogle - Two Fund Portfolio
Re: Jack Bogle - Two Fund Portfolio
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Re: Jack Bogle - Two Fund Portfolio
Certainly, that advice would apply equally well to both US-only and globally diversified equity portfolios. VXUS, VEA, and VWO are all total market index funds just as VTI is.Taylor Larimore wrote: ↑Mon May 10, 2021 8:00 pm
The wonderful thing about Jack Bogle is that his advice is timeless!
Best wishes.
TaylorJack Bogle's Words of Wisdom: "I would say, go into the casino, which is what Wall Street is today. Bet on the entire stock market and then get out of the casino and never show yourself there again.”
Another timeless piece of advice from Mr. Bogle, and something he could not have been more clear about, was the importance of staying the course.
Last edited by Northern Flicker on Tue May 11, 2021 7:48 pm, edited 1 time in total.
Re: Jack Bogle - Two Fund Portfolio
I see it more as being generational. Younger investors on this forum seem very open to international where as older investors less so and in some cases dumping or minimizing it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
Institutions (Vanguard, etc.) absolutely moving more into international.
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Re: Jack Bogle - Two Fund Portfolio
This whole thread is about performance chasing. It isn't about simplicity because Total World or a three fund portfolio is just as simple. It isn't about staying the course because, well, we all know what happened there.Da5id wrote: ↑Mon May 10, 2021 7:26 pmAh performance chasing. Nothing says bogleheads quite like it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Re: Jack Bogle - Two Fund Portfolio
Tony, it wasn't quite that simple. Taylor admits to selling International when needing money for living expenses. In the ultimate letting the tax tail wag the dog, Taylor chose to liquidate taxable positions in International because during the periods of international underperformance, it was more tax efficient to sell his positions with lowest gains. That certainly fits with the concept of this thread...abandon anything in your chosen allocation with recent poor performance and put it all in positions with best performance. Sorry, but that's not what Jack Bogle taught me.abuss368 wrote: ↑Sun May 09, 2021 10:22 pmIf you are referring to Taylor, he did explain that the amount in Total International was small. I believe he took a distribution and closed the account.Northern Flicker wrote: ↑Sun May 09, 2021 9:51 pmIt is used by some BHs, but they are in the minority, and at least one prominent BH who advocated very unambiguously for 20% as the correct amount, subsequently sold out of int'l equities.anon_investor wrote: ↑Sun May 09, 2021 4:04 pmSo 20% would not be enough? That is a number often cited by BHs and Jack Bogle often said if you must have int'l, no more than 20%.Nathan Drake wrote: ↑Sun May 09, 2021 1:11 pm
The good news is that the amount of diversification needed, though hotly debated, doesn't necessarily need to be market weight to add significant protection. Just 30-40%, as most Target Date Funds recommend, is a perfectly adequate position.
Tony
Re: Jack Bogle - Two Fund Portfolio
Talk to Rick Ferri, he'll be happy to explain to you how real estate is significantly underrepresented in broad market indices.
Re: Jack Bogle - Two Fund Portfolio
Wow, there's a great lesson for new Bogleheads: "spend your time here learning about asset allocation, low cost index investing, and staying the course and when part of your plan doesn't perform get rid of it."abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
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Re: Jack Bogle - Two Fund Portfolio
While that is probably true of cryptocurrency speculations and tech sector tilts (older investors often have seen enough speculative bubbles and hot sectors in the present that turn cold in the future not to be lured in), I think older US investors who lived through the US inflation of the 1970's may be more likely to understand the importance of int'l diversification. Certainly, that was an important investing lesson of the 1970's for US investors.DB2 wrote: ↑Tue May 11, 2021 2:48 pmI see it more as being generational. Younger investors on this forum seem very open to international where as older investors less so and in some cases dumping or minimizing it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
Institutions (Vanguard, etc.) absolutely moving more into international.
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Re: Jack Bogle - Two Fund Portfolio
I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.Northern Flicker wrote: ↑Tue May 11, 2021 5:41 pmWhile that is probably true of cryptocurrency speculations and tech sector tilts (older investors often have seen enough speculative bubbles and hot sectors in the present that turn cold in the future not to be lured in), I think older US investors who lived through the US inflation of the 1970's may be more likely to understand the importance of int'l diversification. Certainly, that was an important investing lesson of the 1970's for US investors.DB2 wrote: ↑Tue May 11, 2021 2:48 pmI see it more as being generational. Younger investors on this forum seem very open to international where as older investors less so and in some cases dumping or minimizing it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
Institutions (Vanguard, etc.) absolutely moving more into international.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
So because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
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Re: Jack Bogle - Two Fund Portfolio
More like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
Re: Jack Bogle - Two Fund Portfolio
That is fair enough. I just found his present tense "I am not so sure older investors want international diversification as much as younger investors." an odd formulation for that. I'm maybe not "older" (50s), but didn't add international until 2016 or so despite owning index funds since the early 90s.anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
Re: Jack Bogle - Two Fund Portfolio
He can try, but I suspect the facts might get in the way of his argument.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Jack Bogle - Two Fund Portfolio
I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.Northern Flicker wrote: ↑Tue May 11, 2021 5:41 pmWhile that is probably true of cryptocurrency speculations and tech sector tilts (older investors often have seen enough speculative bubbles and hot sectors in the present that turn cold in the future not to be lured in), I think older US investors who lived through the US inflation of the 1970's may be more likely to understand the importance of int'l diversification. Certainly, that was an important investing lesson of the 1970's for US investors.DB2 wrote: ↑Tue May 11, 2021 2:48 pmI see it more as being generational. Younger investors on this forum seem very open to international where as older investors less so and in some cases dumping or minimizing it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
Institutions (Vanguard, etc.) absolutely moving more into international.
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Re: Jack Bogle - Two Fund Portfolio
Hi Vince -
I am confused. You had said earlier that Jack Bogle, David Swensen, William Bernstein were incorrect. Now Rick Ferri is incorrect?
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio
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Re: Jack Bogle - Two Fund Portfolio
Sgt Schultz!anon_investor wrote: ↑Tue May 11, 2021 8:09 pmEveryone is incorrect! Nobody knows nothing!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio
That was priceless!Triple digit golfer wrote: ↑Tue May 11, 2021 8:12 pmIt is very likely that all of those people have been wrong about something.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
This is where my head is at as well. Will a 20% allocation to international even make a difference at this point after all these years of staying the course?anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
Re: Jack Bogle - Two Fund Portfolio
The tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
"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: Jack Bogle - Two Fund Portfolio
Exactly. No difference and the horrible performance has many people questioning the need and making changes.RJC wrote: ↑Tue May 11, 2021 8:15 pmThis is where my head is at as well. Will a 20% allocation to international even make a difference at this point after all these years of staying the course?anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
If you are 40% stock and 60% bond and allocate 20% of stocks to international, that is only 8%.
MEANINGLESS!
Invest in what we know (US) and works. We work here. We live here. We spend here. We follow laws here. We pay taxes here. We will retire here. Invest here!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio
Vince -vineviz wrote: ↑Tue May 11, 2021 8:17 pmThe tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
I believe Vanguard has a study showing most folks, if they chose to invest in international, only allocate 20% or less. I think it went down with age or fluctuated. Have you read this or know where it is located? Then we can post well documented study.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
It'll make more difference than a 0% allocation, for sure.
Historically, allocating 20% or 25% to international stocks was enough to boost retirement income by 10% or more in the most challenging investing environments.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Jack Bogle - Two Fund Portfolio
I just posted a link to a "well documented study" that is worth reading.
"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: Jack Bogle - Two Fund Portfolio
Vince -
Let’s find the Vanguard one so we have more than one study to support our views. I’ll see if I can locate and copy.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
Saying things in all caps doesn't add to the persuasiveness. At least it tends to make me doubt the person has a strong case and is resorting to shouting.abuss368 wrote: ↑Tue May 11, 2021 8:18 pmExactly. No difference and the horrible performance has many people questioning the need and making changes.RJC wrote: ↑Tue May 11, 2021 8:15 pmThis is where my head is at as well. Will a 20% allocation to international even make a difference at this point after all these years of staying the course?anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
If you are 40% stock and 60% bond and allocate 20% of stocks to international, that is only 8%.
MEANINGLESS!
Invest in what we know (US) and works. We work here. We live here. We spend here. We follow laws here. We pay taxes here. We will retire here. Invest here!
Tony
Regardless of the total amount of stock, adding 20% international decreases volatility. You get about half the maximum benefit at 20% int'l according to the Vanguard white paper on int'l investing.
Mentioning the poorer past performance of international appears to be encouraging performance chasing, which is a common refrain in this thread.
Appeals to US nationalism also seems like an emotional rather than a rational appeal.
Pretty content free post. IMO of course.
Re: Jack Bogle - Two Fund Portfolio
There are literally volumes of studies, all validated and peer-reviewed, which will tell you the same thing: international diversification is a proven and prudent investment technique.
None of Vanguard's LifeStrategy or Target Retirement funds put less than 40% of their equity allocation into international stocks. Do you REALLY think you're going to find a Vanguard white paper which concludes with "never mind, you don't need diversification"?
"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: Jack Bogle - Two Fund Portfolio
Good post, and all true.Da5id wrote: ↑Tue May 11, 2021 8:30 pmSaying things in all caps doesn't add to the persuasiveness. At least it tends to make me doubt the person has a strong case and is resorting to shouting.abuss368 wrote: ↑Tue May 11, 2021 8:18 pmExactly. No difference and the horrible performance has many people questioning the need and making changes.RJC wrote: ↑Tue May 11, 2021 8:15 pmThis is where my head is at as well. Will a 20% allocation to international even make a difference at this point after all these years of staying the course?anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pm
So because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?
If you are 40% stock and 60% bond and allocate 20% of stocks to international, that is only 8%.
MEANINGLESS!
Invest in what we know (US) and works. We work here. We live here. We spend here. We follow laws here. We pay taxes here. We will retire here. Invest here!
Tony
Regardless of the total amount of stock, adding 20% international decreases volatility. You get about half the maximum benefit at 20% int'l according to the Vanguard white paper on int'l investing.
Mentioning the poorer past performance of international appears to be encouraging performance chasing, which is a common refrain in this thread.
Appeals to US nationalism also seems like an emotional rather than a rational appeal.
Pretty content free post. IMO of course.
Re: Jack Bogle - Two Fund Portfolio
I would have thought that Taylor's post on this thread a year and a half earlier would have ended discussion:
"As much as I admire the B & B two-fund portfolio, I prefer the Three-Fund Portfolio because it includes 20% international exposure for "portfolio insurance."
In December 1989 the Japanese Nikkei 225 Index was about 38,000. Today, 30 years later, the Nikkei 225 is about 22,000. Japanese investors who invested entirely in Japanese stocks, are devastated. This could happen to U.S. investors who invest entirely in U.S. stocks."
---Taylor
Pretty sage advice just 18 months earlier.
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Re: Jack Bogle - Two Fund Portfolio
Vince -vineviz wrote: ↑Tue May 11, 2021 8:32 pmThere are literally volumes of studies, all validated and peer-reviewed, which will tell you the same thing: international diversification is a proven and prudent investment technique.
None of Vanguard's LifeStrategy or Target Retirement funds put less than 40% of their equity allocation into international stocks. Do you REALLY think you're going to find a Vanguard white paper which concludes with "never mind, you don't need diversification"?
Not a paper saying not needed. Paper showing average of 20% and older investors being more US based.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
I'm not sure why we would care what the "average" allocation is. Maybe the average international allocation is 20%: so what? That's clearly better than 0%.
And the paper I just linked (did you read it yet?) uses data from 3 million investors to investigate what kinds of investors tend to be more internationally diversified. Conclusion: younger age, higher salary, more education, better financial literacy, and more cosmopolitan zip codes all tend to be associated with higher levels of international diversification.
"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: Jack Bogle - Two Fund Portfolio
Vince -vineviz wrote: ↑Tue May 11, 2021 8:46 pmI'm not sure why we would care what the "average" allocation is. Maybe the average international allocation is 20%: so what? That's clearly better than 0%.
And the paper I just linked (did you read it yet?) uses data from 3 million investors to investigate what kinds of investors tend to be more internationally diversified. Conclusion: younger age, higher salary, more education, better financial literacy, and more cosmopolitan zip codes all tend to be associated with higher levels of international diversification.
That is exactly the point I made above. Older investors have less international. Look up thread.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
This is the sad reality: the very investors who need the diversification benefits the most are the one least like to get it.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Jack Bogle - Two Fund Portfolio
vineviz - As an older investor (at age 84) I get all the equity diversification I feel I need with the TSM fund and its overseas diversification through certain companies. Please stop trying to continually push your thoughts on this matter on everyone. To each his/her own.
Tom D.
Re: Jack Bogle - Two Fund Portfolio
This thread is a back and forth advocacy for 2 different positions. Obviously nobody needs to act on what they read in any particular way. But ideas one disagrees with don't need to stay out there unchallenged, however often they may be repeated.tomd37 wrote: ↑Tue May 11, 2021 9:24 pm vineviz - As an older investor (at age 84) I get all the equity diversification I feel I need with the TSM fund and its overseas diversification through certain companies. Please stop trying to continually push your thoughts on this matter on everyone. To each his/her own.
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Re: Jack Bogle - Two Fund Portfolio
In your case, equities represent how much of your portfolio?tomd37 wrote: ↑Tue May 11, 2021 9:24 pm vineviz - As an older investor (at age 84) I get all the equity diversification I feel I need with the TSM fund and its overseas diversification through certain companies. Please stop trying to continually push your thoughts on this matter on everyone. To each his/her own.
It probably matters little in your case, but his point for accumulators and retirees is sound.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Jack Bogle - Two Fund Portfolio
My equity percentage is 40%, but even in earlier years when it was 60% I still felt the same way as to international diversification. Each of us has their own feelings on the subject and some of us don't want to be "hounded" by others based on their personal feelings. Even Vanguard years ago recommended only 20% for international diversification, but that was their opinion.
Tom D.
Re: Jack Bogle - Two Fund Portfolio
I believe you may be referring to How America Invests 2020, the international allocation by age is on page 24, figure 15, panel C.
Reformatted:
Code: Select all
<25 17%
25-34 21%
35-44 21%
45-54 19%
55-64 18%
65-74 17%
75-84 16%
85+ 15%
.
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Re: Jack Bogle - Two Fund Portfolio
I think the quibble many of us have with the thread is promoting the idea of adandoning an asset allocation because one of the assets underperformed. If an investor has always held a US-only equity portfolio, and chooses to continue to do so, that is great. While I think some of them would benefit from int'l equity diversification, if they are not comfortable with it, they should not take it on. Staying the course with a good asset allocation is never a mistake. Likewise, if an investor has diversified their equity allocation with int'l equities, professional investors would recommend staying the course.abuss368 wrote: ↑Tue May 11, 2021 6:12 pmI am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.Northern Flicker wrote: ↑Tue May 11, 2021 5:41 pmWhile that is probably true of cryptocurrency speculations and tech sector tilts (older investors often have seen enough speculative bubbles and hot sectors in the present that turn cold in the future not to be lured in), I think older US investors who lived through the US inflation of the 1970's may be more likely to understand the importance of int'l diversification. Certainly, that was an important investing lesson of the 1970's for US investors.DB2 wrote: ↑Tue May 11, 2021 2:48 pmI see it more as being generational. Younger investors on this forum seem very open to international where as older investors less so and in some cases dumping or minimizing it.abuss368 wrote: ↑Mon May 10, 2021 6:58 pmI am not so sure about that. Over the past couple of years, there appears to be a lot of posts expressing frustration and abandoning international stocks on the forum. Perhaps motivated by US outperformance.Northern Flicker wrote: ↑Mon May 10, 2021 1:33 pm I thus would challenge Tony's assertion that people are moving towards his line of thinking on this. Quite the opposite is what I observe to have been happening.
Tony
Institutions (Vanguard, etc.) absolutely moving more into international.
Tony
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Re: Jack Bogle - Two Fund Portfolio
So young investors can get away with less diversification?
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Re: Jack Bogle - Two Fund Portfolio
Vince -vineviz wrote: ↑Tue May 11, 2021 8:17 pmThe tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
Check Vanguard study below! It was found! 5 million households.
That should help expand your thoughts.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
Edward Jones has 8 million clients and $1 Trillion AUM according to Wikipedia. Sorry, what was your point again?abuss368 wrote: ↑Tue May 11, 2021 10:03 pmVince -vineviz wrote: ↑Tue May 11, 2021 8:17 pmThe tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
Check Vanguard study below! It was found! 5 million households.
That should help expand your thoughts.
Tony
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Re: Jack Bogle - Two Fund Portfolio
Sorry you forgot to post the link to that study. Please provide. Vanguard has over $6 trillion and over 25 million clients.Da5id wrote: ↑Tue May 11, 2021 10:05 pmEdward Jones has 8 million clients and $1 Trillion AUM according to Wikipedia. Sorry, what was your point again?abuss368 wrote: ↑Tue May 11, 2021 10:03 pmVince -vineviz wrote: ↑Tue May 11, 2021 8:17 pmThe tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
Check Vanguard study below! It was found! 5 million households.
That should help expand your thoughts.
Tony
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Jack Bogle - Two Fund Portfolio
My point was that "5 million households do X" is not a persuasive argument. Many people do many things wrong. Including IMO the 8 million clients who trust Edward Jones with their assets. Not sure what your point is. Just so I understand your thinking, does "5 million households do X" persuade you of anything you don't already believe in?abuss368 wrote: ↑Tue May 11, 2021 10:09 pmSorry you forgot to post the link to that study. Please provide. Vanguard has over $6 trillion and over 25 million clients.Da5id wrote: ↑Tue May 11, 2021 10:05 pmEdward Jones has 8 million clients and $1 Trillion AUM according to Wikipedia. Sorry, what was your point again?abuss368 wrote: ↑Tue May 11, 2021 10:03 pmVince -vineviz wrote: ↑Tue May 11, 2021 8:17 pmThe tendency of some demographic groups to exhibit a stronger home bias is pretty well documented.DB2 wrote: ↑Tue May 11, 2021 7:42 pm I tend to see the older investors adhering to Bogle's advice more on U.S. - holding zero to 20% on international. I've seen a number of younger posters adhering to VT/VTWAX. What we think we are seeing is anecdotal although a poll around age range and international investing would be interesting.
https://www0.gsb.columbia.edu/mygsb/fac ... sified.pdfWe examine the international equity allocations of over 3 million individuals in 296 401(k) plans over the 2006-2011 period. These allocations show enormous cross-individual variation, ranging between zero and over 75%, as well as an upward trend that is only partially accounted for by the slight decrease in importance of the US market relative to the world market. International equity allocations also display strong cohort effects, with younger cohorts investing more internationally than older ones, but also each cohort investing more internationally over time. This finding suggests that the home bias phenomenon may slowly disappear over time. Worker’s salary has a positive effect on international allocations, while account balance has a negative one, but these effects are not economically large. Education, financial literacy and the fraction of foreign-born population measured at the zip code level have strong positive effects on international diversification, consistent with familiarity and information stories. In addition, states with more exports have higher international allocations.
Check Vanguard study below! It was found! 5 million households.
That should help expand your thoughts.
Tony
Tony
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Re: Jack Bogle - Two Fund Portfolio
tomd37 wrote: ↑Tue May 11, 2021 9:56 pm My equity percentage is 40%, but even in earlier years when it was 60% I still felt the same way as to international diversification. Each of us has their own feelings on the subject and some of us don't want to be "hounded" by others based on their personal feelings. Even Vanguard years ago recommended only 20% for international diversification, but that was their opinion.
Regarding the “hounding” that you refer to - in most cases it’s flip-flop Tony that instigates the back and forth discussion. He recommends this portfolio at least 5-6 times per day, at times unsolicited, and often to new investors. A lot of the posts in this thread warning against US only investing would be, in my opinion, non-existent if OP didn’t recommend the portfolio incessantly, constantly dropping links to it across the forum.
Re: Jack Bogle - Two Fund Portfolio
Relatively speaking, it’s less impactful for investors who are nearer to the beginning of accumulation.anon_investor wrote: ↑Tue May 11, 2021 10:01 pmSo young investors can get away with less diversification?
At that stage of the process, savings rate matters more than asset choice. Not saying it’s unimportant, just that young investors have time to recover from the error of under-diversifying .
"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: Jack Bogle - Two Fund Portfolio
Why would this matter? So if most people at vanguard were 100% bonds you would follow them and do the same? Everything you post is the opposite of stay the course. All of your posts are public cries for confirmation.abuss368 wrote: ↑Tue May 11, 2021 10:00 pmThere it is! I knew I read it from Vanguard. Vanguard has under 30% from age 45 on up. Vinny did not believe that and should consider reading!ruud wrote: ↑Tue May 11, 2021 9:57 pmI believe you may be referring to How America Invests 2020, the international allocation by age is on page 24, figure 15, panel C.
Reformatted:Code: Select all
<25 17% 25-34 21% 35-44 21% 45-54 19% 55-64 18% 65-74 17% 75-84 16% 85+ 15%
Thank you for posting!
Tony
I followed this thread when it first started but then stopped because you seemed more concerned with how many posts it had from the content it contained.
The absolute last thing I’d ever use to decide to include international or not is a study of who does what at vanguard. I’d put much more weight into Vanguards White Papers.
I'm trying to think, but nothing happens
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Re: Jack Bogle - Two Fund Portfolio
You got lucky with a very fortunate period to invest as someone with US only investments. That may not be true for someone else investing as an early accumulator or retiree. Do not confuse outcome with strategy.tomd37 wrote: ↑Tue May 11, 2021 9:56 pm My equity percentage is 40%, but even in earlier years when it was 60% I still felt the same way as to international diversification. Each of us has their own feelings on the subject and some of us don't want to be "hounded" by others based on their personal feelings. Even Vanguard years ago recommended only 20% for international diversification, but that was their opinion.
I don’t believe anyone is hounding somebody to change course as much as it is to have an honest debate about a critical part of somebody’s investment decision making process.
There’s a lot of disinformation about a US only portfolio on the basis of performance chasing and it could be quite detrimental to certain investors that have reached certain phases of their lives.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Jack Bogle - Two Fund Portfolio
In other words, put all your eggs in one basket. What could possibly go wrong there? Tony, your statement makes me want to increase my international exposure even more. I still value diversification. With 6 tech stocks accounting for almost 20% of the cap weighted total US market, I'm not willing to risk my future portfolio on your hope and dream for continued outperformance.abuss368 wrote: ↑Tue May 11, 2021 8:18 pmExactly. No difference and the horrible performance has many people questioning the need and making changes.RJC wrote: ↑Tue May 11, 2021 8:15 pmThis is where my head is at as well. Will a 20% allocation to international even make a difference at this point after all these years of staying the course?anon_investor wrote: ↑Tue May 11, 2021 6:51 pmMore like they didn't have them for those reasons in the past and feel like they lived without them for all those years and did fine, so why get them now? I kind of feel like that at least.Da5id wrote: ↑Tue May 11, 2021 6:22 pmSo because International funds used to be expensive hard to find/expensive, older investors don't in the present tense desire international diversification? I'm a bit confused by the logic. Or is it because (some) older investors continue to think of them as hard to find or expensive? Which also seems unlikely?abuss368 wrote: ↑Tue May 11, 2021 6:12 pm I am not so sure older investors want international diversification as much as younger investors. Older investors may be more inclined to invest in the US only. Back then it was a lot more costly not to mention limited opportunities. I have family who worked for Merrill Lynch. Totally different times.
If you are 40% stock and 60% bond and allocate 20% of stocks to international, that is only 8%.
MEANINGLESS!
Invest in what we know (US) and works. We work here. We live here. We spend here. We follow laws here. We pay taxes here. We will retire here. Invest here!
Tony