Thinking of Dropping Out of International Stock Funds

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MrCheapo
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Thinking of Dropping Out of International Stock Funds

Post by MrCheapo »

Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
Blue456
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Re: Thinking of Dropping Out of International Stock Funds

Post by Blue456 »

I am sure plenty of Japanese investors were thinking same thing about international stocks.
Unhandled
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Re: Thinking of Dropping Out of International Stock Funds

Post by Unhandled »

Past performance is no guarantee of future results.

Investments that have done poorly (or well) may not continue to perform poorly (or well).

Diversification.
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starboi
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Re: Thinking of Dropping Out of International Stock Funds

Post by starboi »

You mean International is at a discount? Nice.
Robot Monster
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Re: Thinking of Dropping Out of International Stock Funds

Post by Robot Monster »

Yea, another international thread to add to my list!

Articles
Happier at Home
Venturing Abroad

Boglehead Discussions
"Does International investment still make sense?" link
"For those concerned about International Stocks..." link
"How many here follow Bogle's 'no international' theory?" link
"How much international stock? A suggestion." link
"How much to hold in international equities (VTIAX)?" link
"How on earth can overweighting US stock over international stock possibly be considered Boglehead?" link
"The International Cap Weight (and Beyond!) Discussion Thread" link
"International under-performance" link
"Long Suffering VXUS Holder No More" link
"Reasons to invest internationally, or not." link
"US vs Intl Total Stock Market" link
"VTSAX or VTWAX over the next 35 years?" link
"VXUS - Why? [Vanguard Total International Stock ETF]" link
"Why are you invested (mainly) in US stocks when all long term forecasts are in favour of ex-US?" link
"Why international?" link
"Yes, another International vs Domestic Thread" link

And also,
VXUS: A Dollar Hedge, Not A Value Investment link
Why Jack Bogle Doesn't (Didn't) Own Non-US Stocks link
Fidelity on International Markets link
Thinking of Dropping Out of International Stock Funds
link

Not to mention,
It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
link
Last edited by Robot Monster on Fri Jul 30, 2021 1:52 pm, edited 2 times in total.
Nathan Drake
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

The more threads like these keep popping up the higher my conviction is in exUS

Dunno why you’d want to invest in all US stocks though when you could just invest in the best ones instead.
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Trader Joe
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Re: Thinking of Dropping Out of International Stock Funds

Post by Trader Joe »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
Yes, this is a great idea. Listen to John Bogle's investment strategy.
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JoeRetire
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Re: Thinking of Dropping Out of International Stock Funds

Post by JoeRetire »

MrCheapo wrote: Tue Jul 27, 2021 11:17 amBut I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Past performance is not a guarantee of future results.

But maybe you'll get lucky even if you aren't well-diversified geographically.
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Stinky
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Re: Thinking of Dropping Out of International Stock Funds

Post by Stinky »

The debate continues.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
Ramjet
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Re: Thinking of Dropping Out of International Stock Funds

Post by Ramjet »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
Are you retired or an early accumulator? That makes a difference IMO
Triple digit golfer
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

It may be time to bump my international equity exposure even higher.
02nz
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Re: Thinking of Dropping Out of International Stock Funds

Post by 02nz »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)
I suspect you are calculating this by looking at just share prices. :oops: That leads to a HUGE miscalculation, because more of international stocks' returns have come from dividends.

$10K invested in int'l (VTSMX) in Jan 2001 is worth about $29,300 today. That's up almost 200%, not 30%. CAGR of 5.45%, well ahead of inflation. Same amount invested in US (VGTSX) would be $52,800. That's a big outperformance for U.S., but nowhere near to the extent you stated.
Last edited by 02nz on Tue Jul 27, 2021 12:00 pm, edited 3 times in total.
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
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starboi
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Re: Thinking of Dropping Out of International Stock Funds

Post by starboi »

Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

starboi wrote: Tue Jul 27, 2021 12:08 pm
Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
I meant their advice for average investors. Obviously Berkshire Hathaway has to hold some international.
Triple digit golfer
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
What about the advice of every fund company like Vanguard, Fidelity, Blackrock, and so on who recommend and use a healthy dose of international equities in their target funds?

I don't know what will work out in the end, but using two men as evidence of how to invest wouldn't sit well with me, especially when the opinion of those two men go counter to an entire industry.
Nathan Drake
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

Marseille07 wrote: Tue Jul 27, 2021 12:10 pm
starboi wrote: Tue Jul 27, 2021 12:08 pm
Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
I meant their advice for average investors. Obviously Berkshire Hathaway has to hold some international.
When has Buffett said only US stocks are the optimal choice for investors?
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

Triple digit golfer wrote: Tue Jul 27, 2021 12:12 pm What about the advice of every fund company like Vanguard, Fidelity, Blackrock, and so on who recommend and use a healthy dose of international equities in their target funds?

I don't know what will work out in the end, but using two men as evidence of how to invest wouldn't sit well with me, especially when the opinion of those two men go counter to an entire industry.
One of the two men is arguably the greatest investor of all time...
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

Nathan Drake wrote: Tue Jul 27, 2021 12:16 pm
Marseille07 wrote: Tue Jul 27, 2021 12:10 pm
starboi wrote: Tue Jul 27, 2021 12:08 pm
Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
I meant their advice for average investors. Obviously Berkshire Hathaway has to hold some international.
When has Buffett said only US stocks are the optimal choice for investors?
I don't think he ever said "optimal" but it is well known he's been recommending S&P500 for average investors.
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burritoLover
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Re: Thinking of Dropping Out of International Stock Funds

Post by burritoLover »

U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Nathan Drake
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

Marseille07 wrote: Tue Jul 27, 2021 12:18 pm
Nathan Drake wrote: Tue Jul 27, 2021 12:16 pm
Marseille07 wrote: Tue Jul 27, 2021 12:10 pm
starboi wrote: Tue Jul 27, 2021 12:08 pm
Marseille07 wrote: Tue Jul 27, 2021 11:57 am

Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
I meant their advice for average investors. Obviously Berkshire Hathaway has to hold some international.
When has Buffett said only US stocks are the optimal choice for investors?
I don't think he ever said "optimal" but it is well known he's been recommending S&P500 for average investors.
His comment is more of a “keep it simple stupid” remark, like it’s a fine thing to invest in as a baseline portfolio.

But he’s not a financial advisor, and he never said it was the optimal way to invest

He clearly doesn’t invest his own money that way
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tibbitts
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Re: Thinking of Dropping Out of International Stock Funds

Post by tibbitts »

Ramjet wrote: Tue Jul 27, 2021 11:55 am Are you retired or an early accumulator? That makes a difference IMO
I've come to the conclusion that with regard to allocations, you have to decide early on in your investing career what you want to do, and then approximately stick with it. There will always be new data and research, but it probably won't be "better", just based on a different, or additional, time period. And it will pale in importance compared to staying-the-course. Almost whenever I've made changes based on new evidence, it's been at what turned out to be almost exactly the worst possible time.

You might make some adjustments based on some clearly objective factors, such as if you started investing when an asset category wasn't practical to invest in at a reasonably low cost. Or if some new investing option becomes available: for example, TIPS as part of your bond allocation, that you couldn't have envisioned before they came into existence in the late 1990s.
Last edited by tibbitts on Tue Jul 27, 2021 12:27 pm, edited 1 time in total.
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

Nathan Drake wrote: Tue Jul 27, 2021 12:23 pm His comment is more of a “keep it simple stupid” remark, like it’s a fine thing to invest in as a baseline portfolio.

But he’s not a financial advisor, and he never said it was the optimal way to invest

He clearly doesn’t invest his own money that way
I agree there's an element of KISS, but his focus on the S&P500 is undeniable. After all, his recommendation is 90% in S&P500 - most people don't even hold this much in retirement, let alone only in US large caps.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Dave55 »

Marseille07 wrote: Tue Jul 27, 2021 12:10 pm
starboi wrote: Tue Jul 27, 2021 12:08 pm
Marseille07 wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.
Lots of posters are US-only, including myself. Neither Buffett nor Bogle believed in ex-US, not sure what other evidence you need.
"Warren Buffett's $6 billion investment in Japanese trading companies is paying off"

https://www.bloomberg.com/news/articles ... king-stock
I meant their advice for average investors. Obviously Berkshire Hathaway has to hold some international.
What's an "average investor"?

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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MrCheapo
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Re: Thinking of Dropping Out of International Stock Funds

Post by MrCheapo »

02nz wrote: Tue Jul 27, 2021 11:57 am
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)
I suspect you are calculating this by looking at just share prices. :oops: That leads to a HUGE miscalculation, because more of international stocks' returns have come from dividends.
Ah, I should have been more clearer. The numbers I refer to our *my* returns after removing inflation (it's something my accountant puts together for me). It's also after tax money in a retail (i.e. non-retirement) account.

But I think you hit the nail on the head, if you are in a high tax bracket (Fed 32%, State 10.1%) then international (or dividend focused stock) fair very badly.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Marseille07 wrote: Tue Jul 27, 2021 12:17 pm
Triple digit golfer wrote: Tue Jul 27, 2021 12:12 pm What about the advice of every fund company like Vanguard, Fidelity, Blackrock, and so on who recommend and use a healthy dose of international equities in their target funds?

I don't know what will work out in the end, but using two men as evidence of how to invest wouldn't sit well with me, especially when the opinion of those two men go counter to an entire industry.
One of the two men is arguably the greatest investor of all time...
He is a great investor because he picked companies, many from outside the U.S., and succeeded. That is incompatible with Boglehead style investing.

The whole Boglehead style is index investing, so pointing to a "great investor" who made money by buying individual companies really doesn't hold any water here.
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

Triple digit golfer wrote: Tue Jul 27, 2021 1:01 pm
Marseille07 wrote: Tue Jul 27, 2021 12:17 pm
Triple digit golfer wrote: Tue Jul 27, 2021 12:12 pm What about the advice of every fund company like Vanguard, Fidelity, Blackrock, and so on who recommend and use a healthy dose of international equities in their target funds?

I don't know what will work out in the end, but using two men as evidence of how to invest wouldn't sit well with me, especially when the opinion of those two men go counter to an entire industry.
One of the two men is arguably the greatest investor of all time...
He is a great investor because he picked companies, many from outside the U.S., and succeeded. That is incompatible with Boglehead style investing.

The whole Boglehead style is index investing, so pointing to a "great investor" who made money by buying individual companies really doesn't hold any water here.
But his style has nothing to do with his advice for average investors, which was about passive investing.

Now, if you disagree with his advice then that's a discussion to have. But discarding him because of how he made money doesn't hold water here.
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UpsetRaptor
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Re: Thinking of Dropping Out of International Stock Funds

Post by UpsetRaptor »

If you do, don't forget to flush.
Triple digit golfer
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Marseille07 wrote: Tue Jul 27, 2021 1:06 pm
Triple digit golfer wrote: Tue Jul 27, 2021 1:01 pm
Marseille07 wrote: Tue Jul 27, 2021 12:17 pm
Triple digit golfer wrote: Tue Jul 27, 2021 12:12 pm What about the advice of every fund company like Vanguard, Fidelity, Blackrock, and so on who recommend and use a healthy dose of international equities in their target funds?

I don't know what will work out in the end, but using two men as evidence of how to invest wouldn't sit well with me, especially when the opinion of those two men go counter to an entire industry.
One of the two men is arguably the greatest investor of all time...
He is a great investor because he picked companies, many from outside the U.S., and succeeded. That is incompatible with Boglehead style investing.

The whole Boglehead style is index investing, so pointing to a "great investor" who made money by buying individual companies really doesn't hold any water here.
But his style has nothing to do with his advice for average investors, which was about passive investing.

Now, if you disagree with his advice then that's a discussion to have. But discarding him because of how he made money doesn't hold water here.
I'm not discarding him. He's one person, and his opinion is different than an entire industry. I don't think his opinion is worth more than an entire industry, especially since he made his money doing something very different than the style of investing that this forum is about.
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Re: Thinking of Dropping Out of International Stock Funds

Post by TedSwippet »

Marseille07 wrote: Tue Jul 27, 2021 1:06 pm Now, if you disagree with [Buffet's] advice then that's a discussion to have. But discarding him because of how he made money doesn't hold water here.
Conversely, repeatedly quoting him as your sole argument is a form of logical fallacy.
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gasman
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Re: Thinking of Dropping Out of International Stock Funds

Post by gasman »

My international allocation with a tilt towards EM makes me feel like the knight in Indian Jones and the last crusade guarding the grail.
Waiting a very long time.
Marseille07
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Re: Thinking of Dropping Out of International Stock Funds

Post by Marseille07 »

TedSwippet wrote: Tue Jul 27, 2021 1:13 pm
Marseille07 wrote: Tue Jul 27, 2021 1:06 pm Now, if you disagree with [Buffet's] advice then that's a discussion to have. But discarding him because of how he made money doesn't hold water here.
Conversely, repeatedly quoting him as your sole argument is a form of logical fallacy.
How many would you need? I also mentioned Mr. Bogle btw.
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Re: Thinking of Dropping Out of International Stock Funds

Post by UpperNwGuy »

burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
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burritoLover
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Re: Thinking of Dropping Out of International Stock Funds

Post by burritoLover »

UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
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Re: Thinking of Dropping Out of International Stock Funds

Post by Da5id »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
You had reasons to invest that way. If you choose to bail on the currently trailing asset, well, that is your call to make. I'd not do it, but hey I'm 60% US/40% Int'l.

What are you hoping for here anyway that isn't in the other international threads? There are better places to inform yourself IMO, as these threads are repetitive and somewhat tedious. Bogle! Buffett! US exceptionalism! US has outperformed for last X years, and (implied) therefore it will forever! Diversification away from all US is better! Buy the haystack (but which haystack??)! Vanguard and every other major fund puts international in all their target date funds! Bernstein! Valuations!
Last edited by Da5id on Tue Jul 27, 2021 2:00 pm, edited 1 time in total.
UpperNwGuy
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Re: Thinking of Dropping Out of International Stock Funds

Post by UpperNwGuy »

burritoLover wrote: Tue Jul 27, 2021 1:45 pm
UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
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burritoLover
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Re: Thinking of Dropping Out of International Stock Funds

Post by burritoLover »

UpperNwGuy wrote: Tue Jul 27, 2021 2:08 pm
burritoLover wrote: Tue Jul 27, 2021 1:45 pm
UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
Who cares about 15 years lol.
Da5id
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Re: Thinking of Dropping Out of International Stock Funds

Post by Da5id »

UpperNwGuy wrote: Tue Jul 27, 2021 2:08 pm
burritoLover wrote: Tue Jul 27, 2021 1:45 pm
UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
While I don't do SCV or tilting at all for that matter, that isn't how SCV has historically worked. To the extend one may believe in SCV, it is generally characterized by long periods of underperformance and bursts of overperformance. It is a risk basked play, and only to be attempted by true believers as sticking with it during the underperformance is behaviorally difficult for many.

Not also clear why one would ever care about a specific 15 year segment with a specific start and end date. That type of argument can be used to "prove" all sorts of things.
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anon_investor
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Re: Thinking of Dropping Out of International Stock Funds

Post by anon_investor »

UpperNwGuy wrote: Tue Jul 27, 2021 2:08 pm
burritoLover wrote: Tue Jul 27, 2021 1:45 pm
UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
US SCV has underperformed US TSM by around -5% the last 15 years...
Nathan Drake
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

Da5id wrote: Tue Jul 27, 2021 2:12 pm
UpperNwGuy wrote: Tue Jul 27, 2021 2:08 pm
burritoLover wrote: Tue Jul 27, 2021 1:45 pm
UpperNwGuy wrote: Tue Jul 27, 2021 1:39 pm
burritoLover wrote: Tue Jul 27, 2021 12:21 pm U.S. small cap value stocks have destroyed U.S. total market stocks for the last 50 years so why aren't you all-in on small cap value?
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
3.22% over 50 years. So, $10,000 invested in 1972 in small cap value would be worth $6.7 mi today vs total stock market $1.6 mil. Actually outperformed over the entire history of the U.S. stock market (90 years).
Tell us how badly they've beaten US Total Stock Market over the last 15 years.
While I don't do SCV or tilting at all for that matter, that isn't how SCV has historically worked. To the extend one may believe in SCV, it is generally characterized by long periods of underperformance and bursts of overperformance. It is a risk basked play, and only to be attempted by true believers as sticking with it during the underperformance is behaviorally difficult for many.

Not also clear why one would ever care about a specific 15 year segment with a specific start and end date. That type of argument can be used to "prove" all sorts of things.
Not true

SCV outperforms TSM roughly 82% of the time, a higher rate than stocks beat bonds
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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anon_investor
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Re: Thinking of Dropping Out of International Stock Funds

Post by anon_investor »

TropikThunder wrote: Tue Jul 27, 2021 2:10 pm
Robot Monster wrote: Tue Jul 27, 2021 11:38 am Yea, another international thread to add to my list!

-snip-
Oh thank god. I thought the search feature was broken. :P
One international thread a week, keeps the doctor away!
DB2
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Re: Thinking of Dropping Out of International Stock Funds

Post by DB2 »

gasman wrote: Tue Jul 27, 2021 1:25 pm My international allocation with a tilt towards EM makes me feel like the knight in Indian Jones and the last crusade guarding the grail.
Waiting a very long time.
I've been watching the 4K Blu-ray of these movies lately. :)
ElJefeDelQueso
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Re: Thinking of Dropping Out of International Stock Funds

Post by ElJefeDelQueso »

starboi wrote: Tue Jul 27, 2021 11:36 am You mean International is at a discount? Nice.
Assuming markets are efficient, international is appropriately priced.
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anon_investor
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Re: Thinking of Dropping Out of International Stock Funds

Post by anon_investor »

DB2 wrote: Tue Jul 27, 2021 2:21 pm
gasman wrote: Tue Jul 27, 2021 1:25 pm My international allocation with a tilt towards EM makes me feel like the knight in Indian Jones and the last crusade guarding the grail.
Waiting a very long time.
I've been watching the 4K Blu-ray of these movies lately. :)
IMHO Raiders was the best...
Visitor76
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Re: Thinking of Dropping Out of International Stock Funds

Post by Visitor76 »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
I sold all of my International positions this past spring and never looked back. On top of under performing the US market, International also doesn't provide any balance to US stocks... when the US market is down, International follows suit. :thumbsdown
Wealth is not about having a lot of money; it's about having a lot of options.
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Re: Thinking of Dropping Out of International Stock Funds

Post by JBTX »

MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
I guess the question for you is do you think you have the fortitude to stick with any allocation if it results in long term underperformance to something else? You risk being among the many who buy high and sell low.

Personally, I like the fact that they have underperformed. That to me means

1. Returns are diversified (for better, and for worse)
2. A significant portion of my portfolio is not at all time highs/overvalued/etc, however one wishes to define that.

I'm not making any predictions going forward. I would be more wealthy if I had been 100% US the last 10 years. But that doesn't inform the future. I have actually been modestly increasing international over the last several years.

If you are absolutely compelled to make a change consider a partial change instead of a wholesale change.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Visitor76 wrote: Tue Jul 27, 2021 2:46 pm
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
I sold all of my International positions this past spring and never looked back. On top of under performing the US market, International also doesn't provide any balance to US stocks... when the US market is down, International follows suit. :thumbsdown
Since you were looking for something not fully correlated with U.S. stocks, what did you add in place of international that suited your portfolio better?
JBTX
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Re: Thinking of Dropping Out of International Stock Funds

Post by JBTX »

Visitor76 wrote: Tue Jul 27, 2021 2:46 pm
MrCheapo wrote: Tue Jul 27, 2021 11:17 am Hi

So like a good Bogle-head I split my assets b/w US-Stocks, International Stocks and Fixed Assets (Bonds, MM etc.) for the last few decades.

Reviewing performance over the last 20 years of say VGTSX (total international stock fund) I see it's barely up 30% compared to say VTSMX (total stock fund) which is up 250%.

Looking at my portfolio of funds ALL of my Vanguard international funds (Total, European, Pacific) are all up less than 30% and often flat (i.e. VEURX)

Fortunately, I'm heavily exposed to US stocks which have put me in a nice position. But I'm seriously thinking, why on earth invest in these international funds if they barely beat inflation.

Thoughts?
I sold all of my International positions this past spring and never looked back. On top of under performing the US market, International also doesn't provide any balance to US stocks... when the US market is down, International follows suit. :thumbsdown
On the one hand you said international is underperforming and the other you say it provides no balance. How can both be true?
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Re: Thinking of Dropping Out of International Stock Funds

Post by Yesterdaysnews »

30% return over 20 years? Is that correct? I knew it was bad but that’s worse than I thought. No way it stays that pathetic for the next 20…. Or maybe it will, who knows!
EnjoyIt
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Re: Thinking of Dropping Out of International Stock Funds

Post by EnjoyIt »

Of my equities, I used to have a 30% allocation in international. Over the last year or so I have allowed my international portion to dwindle down to 25% due to US out performance. I still keep buying international, but at a much slower rate. I still believe in the diversification it provides, but at 5% less. I don't believe in making drastic changes, but the 5% appears right.

I would like to point out that I have not sold any international. I just buy less.
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