International is in meltdown
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International is in meltdown
VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
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Re: International is in meltdown
Cheaper shares mean even greater long term upsidestocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
All this hysteria is a great reminder of why I won’t be anywhere near my current asset allocation near retirement
Re: International is in meltdown
I have a very long time horizon. The international meltdown is exactly what I want. I'm a kid in a candy store these days.
Global stocks, US bonds, and time.
Re: International is in meltdown
It occurred to me ironically that discovering bogleheads ended up being rather costly for me because I was unaware of the possibility of investing in international stocks as a naive 22 yr old. Previous to that discovery, I stuck to the s&p. 15 years of pumping money into international funds have not gone well for me. I'm not going to stop now. But can't blame anybody under 40 who is skeptical of international funds.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Re: International is in meltdown
I can, easily. You should not use past performance to decide your mutual funds.mrwalken wrote: ↑Thu Mar 12, 2020 11:32 amIt occurred to me ironically that discovering bogleheads ended up being rather costly for me because I was unaware of the possibility of investing in international stocks as a naive 22 yr old. Previous to that discovery, I stuck to the s&p. 15 years of pumping money into international funds have not gone well for me. I'm not going to stop now. But can't blame anybody under 40 who is skeptical of international funds.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
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Re: International is in meltdown
It's an unmitigated disaster... even at the current drop from Jan 2018 just for a break even International has to DOUBLE. And that is if it stops going down from here. If it falls say another 10-15% then there are slim chances that it will recover in this decade. Not sure if that will happen or not but it seems increasingly unlikely.
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Re: International is in meltdown
This can be said about particular industries within the S&P500.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:39 amIt's an unmitigated disaster... even at the current drop from Jan 2018 just for a break even International has to DOUBLE. And that is if it stops going down from here. If it falls say another 10-15% then there are slim chances that it will recover in this decade. Not sure if that will happen or not but it seems increasingly unlikely.
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Re: International is in meltdown
That might still be enough to outperform US though.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:39 amIt's an unmitigated disaster... even at the current drop from Jan 2018 just for a break even International has to DOUBLE. And that is if it stops going down from here. If it falls say another 10-15% then there are slim chances that it will recover in this decade. Not sure if that will happen or not but it seems increasingly unlikely.
Re: International is in meltdown
I am happy that after I'm paid tomorrow, 100% of my investment contributions will go to VXUS. This is just trying to keep my allocation somewhat in line.
International stocks have had a lot going against them for a while now, and it has accelerated. That is not reason for me to abandon a well thought out plan.
International stocks have had a lot going against them for a while now, and it has accelerated. That is not reason for me to abandon a well thought out plan.
Re: International is in meltdown
Diversification
Re: International is in meltdown
Just curious, when do you re-assess your plan if it's only cost you money for, say 10, 15, or 20 years?
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Re: International is in meltdown
That didn't take long.
Covid 19 steals the headlines and.....another US vs ex-US discussion.
Covid 19 steals the headlines and.....another US vs ex-US discussion.
"..the cavalry ain't comin' kid, you're on your own..."
Re: International is in meltdown
Are you suggesting this is actionable intelligence for a 10 year forecast?stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Market timing over the short term is hard enough.
I continue to hold world equity allocations at their global market weight via VTWAX. If the market decides international will do less well, the market weight will auto adjust.
I like not having to guess the future.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: International is in meltdown
Yup. Buying all VXUS today. At least 75% of my ammo.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Time is the ultimate currency.
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Re: International is in meltdown
As Dirty Harry said, a man's gotta know his limitations. No matter what happens, you'll have a moment where you know, in the future, what you could have invested in now to make the "most money". I already know that now. But you have to invest based on what is available. The fact that international has done poorly is the same fact that it's not overvalued. What can you do? One thing you can do is rebalance, ha ha.
This time is the same
Re: International is in meltdown
Well, Bogle was not big on rebalancing, so if you want justification for not doing it, there is that.firebirdparts wrote: ↑Thu Mar 12, 2020 11:56 amAs Dirty Harry said, a man's gotta know his limitations. No matter what happens, you'll have a moment where you know, in the future, what you could have invested in now to make the "most money". I already know that now. But you have to invest based on what is available. The fact that international has done poorly is the same fact that it's not overvalued. What can you do? One thing you can do is rebalance, ha ha.
Re: International is in meltdown
That's fair. I'm just saying, for your average joe schmo, who has seen international go up less whenever the s&p goes up and go down more whenever the s&p goes down basically every day for 15 years, it's hard not to be skeptical. I've started to accept that international may under-perform the s&p for the rest of my life, however long that will be.jibantik wrote: ↑Thu Mar 12, 2020 11:38 amI can, easily. You should not use past performance to decide your mutual funds.mrwalken wrote: ↑Thu Mar 12, 2020 11:32 amIt occurred to me ironically that discovering bogleheads ended up being rather costly for me because I was unaware of the possibility of investing in international stocks as a naive 22 yr old. Previous to that discovery, I stuck to the s&p. 15 years of pumping money into international funds have not gone well for me. I'm not going to stop now. But can't blame anybody under 40 who is skeptical of international funds.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Re: International is in meltdown
This has given us a huge Tax Loss Harvesting opportunity, so everyone should at least jump on that, just like in 2008. These losses will carryover for a long time, so you are at least making lemonade out of lemons. Swapping VTIAX for VFWAX works quite well for this.
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Re: International is in meltdown
It should not be an unmitigated disaster: The overwhelming majority of Bogleheads, including those who advocate international, consistently advocate mitigating risks to one asset class with others. This generally means mitigating international stocks with domestic stocks and bonds.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:39 amIt's an unmitigated disaster... even at the current drop from Jan 2018 just for a break even International has to DOUBLE. And that is if it stops going down from here. If it falls say another 10-15% then there are slim chances that it will recover in this decade. Not sure if that will happen or not but it seems increasingly unlikely.
Also, if it falls another 10-15%, it will still be better off than the ~62% it fell from its 2007 peak to its trough in 2009. It did take roughly a decade to recover from that. Fortunately, my time frame is longer than a decade.
This is one of the events I will consider as I figure out what my US vs. International allocation should be as I approach my drawdown phase 20+ years from now, but not exclusive of the longer term history, nor of the diversification against risks of a possible major US-specific underperformance.
Also, this reminds me, I need to check how my new employer's 401k handles rebalancing.
Re: International is in meltdown
Domestic is down 33% from its peak. International is down 28% from its peak.
ETA: peak in the last year.
ETA: peak in the last year.
Last edited by Ketawa on Thu Mar 12, 2020 12:24 pm, edited 1 time in total.
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Re: International is in meltdown
Does that work? They seem substantially identical, subjecting you to the 30 day wash sale rule.gbronc wrote: ↑Thu Mar 12, 2020 12:08 pm This has given us a huge Tax Loss Harvesting opportunity, so everyone should at least jump on that, just like in 2008. These losses will carryover for a long time, so you are at least making lemonade out of lemons. Swapping VTIAX for VFWAX works quite well for this.
Code: Select all
Region VTIAX VFWAX
------ ----- -----
Emerging Markets 22.5% 22.6%
Europe 41.5% 41.9%
Pacific 28.0% 28.3%
Middle East 0.4% 0.3%
North America 6.8% 6.1%
Other 0.8% 0.8%
Re: International is in meltdown
EM is still even with the S&P since the Feb 19 high. The US dollar has been stronger today.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Amateur Self-Taught Senior Macro Strategist
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Re: International is in meltdown
Well, I suppose I should be thankful I can buy many more shares of a holding I'm not crazy about!
Is there an emoji that depicts someone pinching their nostrils?
Broken Man 1999
Is there an emoji that depicts someone pinching their nostrils?
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
Re: International is in meltdown
I'm showing domestic (as measured by US total market VTI) down 26% from its peak at this very moment. Where are you getting 33%?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Re: International is in meltdown
VFWAX tracks FTSE All-World ex US Index. FTIAX tracks Spl Total International Stock Index. The consensus opinion is generally that if funds track different indexes, they are not considered "substantially equivalent." Please see my signature.iamlucky13 wrote: ↑Thu Mar 12, 2020 12:23 pmDoes that work? They seem substantially identical, subjecting you to the 30 day wash sale rule.gbronc wrote: ↑Thu Mar 12, 2020 12:08 pm This has given us a huge Tax Loss Harvesting opportunity, so everyone should at least jump on that, just like in 2008. These losses will carryover for a long time, so you are at least making lemonade out of lemons. Swapping VTIAX for VFWAX works quite well for this.
Code: Select all
Region VTIAX VFWAX ------ ----- ----- Emerging Markets 22.5% 22.6% Europe 41.5% 41.9% Pacific 28.0% 28.3% Middle East 0.4% 0.3% North America 6.8% 6.1% Other 0.8% 0.8%
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
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Re: International is in meltdown
I am buying International small-value all the way down.
Re: International is in meltdown
Apples to oranges comparison. Bonds are added to allocations as ballast, and for income in the 'old days'. Does anyone on this board view international exposure as adding ballast in the face of a drawdown of equities?
Re: International is in meltdown
Just TLH traded some VTIAX from 9/2015. Ouch!
Re: International is in meltdown
There are many thread on Bogleheads and various blogs agreeing that it is enough of a difference to make it an acceptable TLH to the IRS. I've done it multiple times over the years, so it better be OK. Shows you how bad international has done that I've done it multiple times with International, but it's been a long time since TLH worked for US equities.iamlucky13 wrote: ↑Thu Mar 12, 2020 12:23 pmDoes that work? They seem substantially identical, subjecting you to the 30 day wash sale rule.gbronc wrote: ↑Thu Mar 12, 2020 12:08 pm This has given us a huge Tax Loss Harvesting opportunity, so everyone should at least jump on that, just like in 2008. These losses will carryover for a long time, so you are at least making lemonade out of lemons. Swapping VTIAX for VFWAX works quite well for this.
Code: Select all
Region VTIAX VFWAX ------ ----- ----- Emerging Markets 22.5% 22.6% Europe 41.5% 41.9% Pacific 28.0% 28.3% Middle East 0.4% 0.3% North America 6.8% 6.1% Other 0.8% 0.8%
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Re: International is in meltdown
And now he's dead, I don't feel totally well myself.
This time is the same
Re: International is in meltdown
Thank you. That makes sense to me.Chief_Engineer wrote: ↑Thu Mar 12, 2020 3:17 pmInternational is a ballast for a weak dollar or any risk that is US specific.
Re: International is in meltdown
If you don't have one stinker in your port you're not diversified.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: International is in meltdown
But it's not.
In the lost decade, the US was the stinker vs international.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: International is in meltdown
Yes, with respect to US versus International, that is the argument. I have some International myself. I'm just pointing out there is a limitation to the wisdom of the quote. For younger investors, the stinker probably has always been International.
Re: International is in meltdown
One could say that this is exactly how international potentially limbers up for that predicted outperformance. It seems to me that the easiest time to outperform is right after a crash, simply because a class rebounds faster/higher. Also, US large growth may simply give up more, resulting in intl outperformance. Many ways that could go.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 amI know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out.
But also, no one promised that the outperforming asset class would perform well.
Re: International is in meltdown
Also, the forecast is the for whole decade.
Not for 3 months into the decade.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: International is in meltdown
Did he explain how to maintain age in bonds without rebalancing?tibbitts wrote: ↑Thu Mar 12, 2020 11:58 amWell, Bogle was not big on rebalancing, so if you want justification for not doing it, there is that.firebirdparts wrote: ↑Thu Mar 12, 2020 11:56 amAs Dirty Harry said, a man's gotta know his limitations. No matter what happens, you'll have a moment where you know, in the future, what you could have invested in now to make the "most money". I already know that now. But you have to invest based on what is available. The fact that international has done poorly is the same fact that it's not overvalued. What can you do? One thing you can do is rebalance, ha ha.
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Re: International is in meltdown
Well, it's always possible that the unprecedented will happen and US will outperform forever. Or maybe history will repeat as it usually does.mrwalken wrote: ↑Thu Mar 12, 2020 12:01 pmThat's fair. I'm just saying, for your average joe schmo, who has seen international go up less whenever the s&p goes up and go down more whenever the s&p goes down basically every day for 15 years, it's hard not to be skeptical. I've started to accept that international may under-perform the s&p for the rest of my life, however long that will be.jibantik wrote: ↑Thu Mar 12, 2020 11:38 amI can, easily. You should not use past performance to decide your mutual funds.mrwalken wrote: ↑Thu Mar 12, 2020 11:32 amIt occurred to me ironically that discovering bogleheads ended up being rather costly for me because I was unaware of the possibility of investing in international stocks as a naive 22 yr old. Previous to that discovery, I stuck to the s&p. 15 years of pumping money into international funds have not gone well for me. I'm not going to stop now. But can't blame anybody under 40 who is skeptical of international funds.stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
Re: International is in meltdown
We’re just at the beginning of this story. Are you 100% confident that the US is (1) going to have less health and economic fallout and (2) handle it better than Europe, Japan and South Korea?stocknoob4111 wrote: ↑Thu Mar 12, 2020 11:25 am VXUS (Vanguard Total International ETF - corresponds to MUTF: VTIAX) is almost down a staggering -12% today, that puts International down 35% from the peak in Jan 2018 I know the predictions were for International to outperform US in this decade but the drawdowns have been so deep I don't know if this is going to pan out. I know the decade is still just starting and a ton can happen in the next 9 years but it isn't looking good for a recovery if it drops 50% which isn't too far away.
Re: International is in meltdown
Bogle advised against Int'l assets, as you all know, but someone here pushed for it, for the 3-fund portfolio, and you followed. This is what you're left with: a big, big hole to climb from. And as you all proclaim: no one knows nothing, if you will ever get out.
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Re: International is in meltdown
I would say they were both stinkers, but my preferred small-value variant of International sure looked hawt.
https://www.portfoliovisualizer.com/bac ... ion3_3=100
Re: International is in meltdown
I was wondering about this - who was originally pushing for ex-US indexing to become part of the Bogleheads strategy? It didn't come from Bogle, obviously, since he had been consistently against it.Starchild wrote: ↑Thu Mar 12, 2020 7:52 pm Bogle advised against Int'l assets, as you all know, but someone here pushed for it, for the 3-fund portfolio, and you followed. This is what you're left with: a big, big hole to climb from. And as you all proclaim: no one knows nothing, if you will ever get out.
Re: International is in meltdown
The OP of the "three-fund portfolio" thread in the theory index. I also question "all-bond" as the third investment. Times change, and again, "no one knows nothing".visualguy wrote: ↑Thu Mar 12, 2020 9:23 pmI was wondering about this - who was originally pushing for ex-US indexing to become part of the Bogleheads strategy? It didn't come from Bogle, obviously, since he had been consistently against it.Starchild wrote: ↑Thu Mar 12, 2020 7:52 pm Bogle advised against Int'l assets, as you all know, but someone here pushed for it, for the 3-fund portfolio, and you followed. This is what you're left with: a big, big hole to climb from. And as you all proclaim: no one knows nothing, if you will ever get out.
Re: International is in meltdown
I see - thanks. That's funny because if you look it up, he actually sold his entire ex-US holding later on (he said it was more beneficial to him to sell that from a tax perspective), and then he wasn't holding ex-US any longer.Starchild wrote: ↑Thu Mar 12, 2020 9:34 pmThe OP of the "three-fund portfolio" thread in the theory index. I also question "all-bond" as the third investment. Times change, and again, "no one knows nothing".visualguy wrote: ↑Thu Mar 12, 2020 9:23 pmI was wondering about this - who was originally pushing for ex-US indexing to become part of the Bogleheads strategy? It didn't come from Bogle, obviously, since he had been consistently against it.Starchild wrote: ↑Thu Mar 12, 2020 7:52 pm Bogle advised against Int'l assets, as you all know, but someone here pushed for it, for the 3-fund portfolio, and you followed. This is what you're left with: a big, big hole to climb from. And as you all proclaim: no one knows nothing, if you will ever get out.
Re: International is in meltdown
VTIAXiamlucky13 wrote: ↑Thu Mar 12, 2020 12:23 pmDoes that work? They seem substantially identical, subjecting you to the 30 day wash sale rule.gbronc wrote: ↑Thu Mar 12, 2020 12:08 pm This has given us a huge Tax Loss Harvesting opportunity, so everyone should at least jump on that, just like in 2008. These losses will carryover for a long time, so you are at least making lemonade out of lemons. Swapping VTIAX for VFWAX works quite well for this.
Code: Select all
Region VTIAX VFWAX ------ ----- ----- Emerging Markets 22.5% 22.6% Europe 41.5% 41.9% Pacific 28.0% 28.3% Middle East 0.4% 0.3% North America 6.8% 6.1% Other 0.8% 0.8%
Holds 7449 stocks with a median market cap of $28.3 billion
VFWAX
Holds 3331 stocks with a median market cap of $33.9 billion
Something to consider, and perhaps document if you do use them as TLH partners.