Thinking of Dropping Out of International Stock Funds

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vv19
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Re: Thinking of Dropping Out of International Stock Funds

Post by vv19 »

OP, do what makes you sleep better at night. International may or may not outperform the US equities in the coming years but if it keeps you up at night, it is not worth it.

I sold my international allocation last year and I am completely content with that decision. I just don't think the risk/reward justifies buying exUS stocks.
Triple digit golfer
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Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
That is incorrect. The return has been 242% over the last 20 years, according to Portfolio Visualizer. This equates to a 6.33% CAGR and a 4.11% real CAGR.

https://www.portfoliovisualizer.com/bac ... ion1_1=100
Nathan Drake
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

Triple digit golfer wrote: Tue Jul 27, 2021 3:05 pm
Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
That is incorrect. The return has been 242% over the last 20 years, according to Portfolio Visualizer. This equates to a 6.33% CAGR and a 4.11% real CAGR.

https://www.portfoliovisualizer.com/bac ... ion1_1=100
A higher rate of return than what is expected of US stocks over the next decade

And a lower rate of return than what’s expected from exUS next decade
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02nz
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Re: Thinking of Dropping Out of International Stock Funds

Post by 02nz »

MrCheapo wrote: Tue Jul 27, 2021 12:46 pm ... if you are in a high tax bracket (Fed 32%, State 10.1%) then international (or dividend focused stock) fair very badly.
Vanguard Total International's dividends are typically 70-80% qualified. Qualified dividends are taxed at LTCG rates, much more favorable than normal income.
GoneOnTilt
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Re: Thinking of Dropping Out of International Stock Funds

Post by GoneOnTilt »

Triple digit golfer wrote: Tue Jul 27, 2021 12:12 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.
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.
"Industry" being the key word. Just food for thought.
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anon_investor
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Re: Thinking of Dropping Out of International Stock Funds

Post by anon_investor »

Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
Has Total Bond out performed International?
Boglebiker
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Re: Thinking of Dropping Out of International Stock Funds

Post by Boglebiker »

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’m right there with you!
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Re: Thinking of Dropping Out of International Stock Funds

Post by minimalistmarc »

Buy the all world and go to sleep
02nz
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Re: Thinking of Dropping Out of International Stock Funds

Post by 02nz »

anon_investor wrote: Tue Jul 27, 2021 3:40 pm
Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
Has Total Bond out performed International?
No, and as I noted upthread the "30% return over 20 years" bit is wildly off, international stocks were up about 240% from Jul 2001 to Jun 2021, for 6.33% CAGR. U.S. stock market was up 460% or 9% CAGR. Total bond was 4.33% CAGR.
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Re: Thinking of Dropping Out of International Stock Funds

Post by 02nz »

JBTX wrote: Tue Jul 27, 2021 2:50 pm
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?
I think by lack of balance I think Visitor76 meant international stocks being correlated to US stocks.
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Re: Thinking of Dropping Out of International Stock Funds

Post by JBTX »

02nz wrote: Tue Jul 27, 2021 4:52 pm
JBTX wrote: Tue Jul 27, 2021 2:50 pm
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?
I think by lack of balance I think Visitor76 meant international stocks being correlated to US stocks.
Correlated short term or long term? If there is a huge discrepancy in long term performance that implies at least some lack of long term correlation.
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anon_investor
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Re: Thinking of Dropping Out of International Stock Funds

Post by anon_investor »

02nz wrote: Tue Jul 27, 2021 4:49 pm
anon_investor wrote: Tue Jul 27, 2021 3:40 pm
Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
Has Total Bond out performed International?
No, and as I noted upthread the "30% return over 20 years" bit is wildly off, international stocks were up about 240% from Jul 2001 to Jun 2021, for 6.33% CAGR. U.S. stock market was up 460% or 9% CAGR. Total bond was 4.33% CAGR.
What about Long Term US Treasuries?
02nz
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Re: Thinking of Dropping Out of International Stock Funds

Post by 02nz »

anon_investor wrote: Tue Jul 27, 2021 4:58 pm
02nz wrote: Tue Jul 27, 2021 4:49 pm
anon_investor wrote: Tue Jul 27, 2021 3:40 pm
Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 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!
Has Total Bond out performed International?
No, and as I noted upthread the "30% return over 20 years" bit is wildly off, international stocks were up about 240% from Jul 2001 to Jun 2021, for 6.33% CAGR. U.S. stock market was up 460% or 9% CAGR. Total bond was 4.33% CAGR.
What about Long Term US Treasuries?
Hey you know (or can learn) Portfolio Visualizer just as well as I. :happy LTTs may well have outperformed international during this period, given declining interest rates.
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Re: Thinking of Dropping Out of International Stock Funds

Post by frugalecon »

The share of the U.S. stock market in global stock market capitalization at the beginning of 2021 was around 55%. If a person holds the global portfolio and the U.S. continues to outperform, over time that person’s portfolio will converge to 100% U.S. But is it really reasonable to expect that the U.S. will asymptotically approach 100% of total world stock market capitalization? I guess that’s possible, but the U.S. share used to be much lower, and there is no immutable law of nature that it won’t go lower again. Perhaps more and more U.S. companies will end up privately held, in which case they aren’t accessible to the public markets. Perhaps the U.S. tech giants will lose their edge over all overseas rivals. Perhaps some kind of unforeseen event will seriously damage U.S. economic performance. (Yellowstone super volcano erupts? Other random events - or not random events?) I am willing to accept underperformance in a portion of my portfolio to offset the risk from these factors, even though I would be richer if I had bought only U.S. stock funds. I would be even richer if I had invested everything in Amazon! Hindsight is just…not very helpful, unless it exposes systematic, knowable-at-the-time errors in judgment and decision making.
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Re: Thinking of Dropping Out of International Stock Funds

Post by UpperNwGuy »

burritoLover 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.
Who cares about 15 years lol.
I care a lot about 15 years because, unlike you (apparently), I am old and may not be around 20 years from now. Not everyone on this board is able to invest for the next 50 years.
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Re: Thinking of Dropping Out of International Stock Funds

Post by burritoLover »

UpperNwGuy wrote: Tue Jul 27, 2021 5:40 pm
burritoLover 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

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.
I care a lot about 15 years because, unlike you (apparently), I am old and may not be around 20 years from now. Not everyone on this board is able to invest for the next 50 years.
Which is irrelevant because 15 years is useless noise. It tells you virtually nothing about the next 15.
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Re: Thinking of Dropping Out of International Stock Funds

Post by palaheel »

UpperNwGuy wrote: Tue Jul 27, 2021 5:40 pm
burritoLover 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

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.
I care a lot about 15 years because, unlike you (apparently), I am old and may not be around 20 years from now. Not everyone on this board is able to invest for the next 50 years.
I'm also old and might not be here 20 years from now. But we both have to place bets: will the next 20 years look more like the last 50, or more like the last 15? I'm going with more data, but there's no certainty either way. Or maybe it won't make a whole lot of difference.
Nothing to say, really.
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gasman
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Re: Thinking of Dropping Out of International Stock Funds

Post by gasman »

Boglebiker wrote: Tue Jul 27, 2021 4:00 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’m right there with you!
Still staying the course on the road less traveled but recommended by Messrs. Arnott and Grantham for a long time now.
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Re: Thinking of Dropping Out of International Stock Funds

Post by nisiprius »

Yesterdaysnews wrote: Tue Jul 27, 2021 3:02 pm 30% return over 20 years? Is that correct?
No, that is not correct.

20 years includes the period 2002-2008 when international stocks performed well, among other things. I have no idea where that number comes from, but five minutes on PortfolioVisualizer will show us that from 6/27/2001 through 6/27/2021 the Vanguard Total International Stock Market Index Fund more than tripled an investor's money. More specifically, cumulatively, it added 241% to an investment.

Source

Image

And if we click on the "inflation adjustment" box, we find that it more than doubled the real value of an investor's money; specifically, in real terms, cumulatively, it added 124% to an investment.

Image

Over a twenty-year period, that's over 6%/year annualized (CAGR), and over 4%/year over inflation. That's not anything particularly exciting, but it made money for sure and it beat inflation for sure.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Wannaretireearly »

Today, I tried to buy some EM using backdoor Roth $ for this year. Only got to do my conversion from IRA today. Hope for another dramatic drop next day or two so I can buy, then a rocketship to heaven.

In all honesty, Intl has 10 years for me before I need to use some of it in ER. Clock is ticking! 🚀
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Re: Thinking of Dropping Out of International Stock Funds

Post by WhiteMaxima »

I always keep 20% AA into international even though it is under performed to SP500 rent decade.
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Re: Thinking of Dropping Out of International Stock Funds

Post by invest4 »

Hindsight always with clarity.

You saw the list of threads...doubtful any new wrinkles unearthed during this round.

I am not immune from the feeling of disappointment of potential gains lost (if I had only done x, y, or z instead). We see it all the time...crypto, gold, etc...the regret of not having reaped the benefits with the right investments at the right time.

I maintain 20% of International for diversification and that has value to me. I don't know if / when we may see better results..but am fine to continue to purchase according to my allocation with the potential for future upside after many years of "buying low" as it were. YMMV.

Best wishes.
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Re: Thinking of Dropping Out of International Stock Funds

Post by abuss368 »

Stop drop and roll!

Tony
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Re: Thinking of Dropping Out of International Stock Funds

Post by Stinky »

abuss368 wrote: Tue Jul 27, 2021 7:15 pm Stop drop and roll!

Tony
Is something on fire?

Definitely not international.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Nathan Drake »

Image

What a terrible time to invest!
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Re: Thinking of Dropping Out of International Stock Funds

Post by averagedude »

These kind of threads make me glad that I bought VWO (emerging markets) over the last 2 trading days. If it is down again tomorrow, I will be buying more.
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Re: Thinking of Dropping Out of International Stock Funds

Post by FIREchief »

I'll just keep riding that horse that got me here. Giddy Up! 8-)
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Re: Thinking of Dropping Out of International Stock Funds

Post by abuss368 »

Stinky wrote: Tue Jul 27, 2021 7:30 pm
abuss368 wrote: Tue Jul 27, 2021 7:15 pm Stop drop and roll!

Tony
Is something on fire?

Definitely not international.
I called Mr. Gekko tonight. He is all in on Blue Star and Teldar Paper. He said international “is a dog with fleas”.

Tony
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Re: Thinking of Dropping Out of International Stock Funds

Post by lostdog »

I was right but I didn't think a thread like this would show up this quick. :oops:
Last edited by lostdog on Tue Jul 27, 2021 8:54 pm, edited 1 time in total.
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Re: Thinking of Dropping Out of International Stock Funds

Post by lostdog »

If you can't hold a lagging asset, you shouldn't be investing at all.

Are you going to jump back into international when it does well? Seriously...

Please notice that some of the all U.S. folks are over the top with the idol worship.
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Da5id
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Re: Thinking of Dropping Out of International Stock Funds

Post by Da5id »

lostdog wrote: Tue Jul 27, 2021 8:53 pm If you can't hold a lagging asset, you shouldn't be investing at all.

Are you going to jump back into international when it does well? Seriously...

Please notice that some of the all U.S. folks are over the top with the idol worship.
Yep. Feels a bit like the 0% bonds threads. Pity about that "stay the course" thing...
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Re: Thinking of Dropping Out of International Stock Funds

Post by rtt22 »

starboi wrote: Tue Jul 27, 2021 11:36 am You mean International is at a discount? Nice.
An X% of my portfolio is in int'l stock funds too, but the thing is .... they have been at a discount FOR A LONG TIME !!! Stay the course, maybe, but aaargg :annoyed
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Re: Thinking of Dropping Out of International Stock Funds

Post by Flyer24 »

A series of posts discussing moderator actions or inactions were deleted. Use the report icon or PM a moderator as needed instead of publicly discussing how to control threads. Let's keep it focused on the OP. Thanks.
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Re: Thinking of Dropping Out of International Stock Funds

Post by retireIn2020 »

If you can't hold a lagging asset, you shouldn't be investing at all.

Are you going to jump back into international when it does well? Seriously...
I've been waiting a long time for it to do well, just posting my experience here, I've been invested in ex-us for over 20 years and it's underperformed the whole time, and I mean it's underperformed bonds. Looking back to the early 2000's all my coworkers told me not to invest in international, needless to say I didn't listen. Now retired, hopefully it does well at some point. Maybe I should leave it as my legacy :happy .
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Re: Thinking of Dropping Out of International Stock Funds

Post by lostdog »

"Over the past 70 years the US stock market has been a darling, outperforming foreign stocks by 1% per year.

$10k invested in US stocks in 1950 turned into $14 million vs. only $8m in foreign stocks.

Want to know how much of that outperformance has come since 2009?

All of it"

-Meb Faber

Source: https://twitter.com/MebFaber/status/1120390142496247812
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LongTermInvestor88
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Re: Thinking of Dropping Out of International Stock Funds

Post by LongTermInvestor88 »

Does anyone even search for the previous 10,000 posts on this topic
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Re: Thinking of Dropping Out of International Stock Funds

Post by tomsense76 »

LongTermInvestor88 wrote: Wed Jul 28, 2021 1:08 am Does anyone even search for the previous 10,000 posts on this topic
I read several when I was trying to decide whether to hold international in taxable. Already had it through a target date fund in my retirement account, but that would be easy to change if I decided to. Taxable is kind of a commitment. Though agree with others after reading several threads they all blur together. The takeaways can be summarized in a few paragraphs ( viewtopic.php?p=5731763&sid=f35bcb0b6e5 ... e#p5731763 )
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Re: Thinking of Dropping Out of International Stock Funds

Post by sf_tech_saver »

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?
My philosophy is to 'only' adjust go-forward purchases and never to never ever rebalance. After 3 years of living a BH investing life in a middle-aged accumulation phase, my #1 piece of advice is to stop thinking about re-mix outside of the next big buy you make. I'm largely an after-tax investor so this is a little easier for me as selling equities is nearly impossible.

I've made the opposite decision this year and started buying a 50/50 of VT/VTI to add some international exposure. Using VT allows me to still capture the growth of VTI within VT. I'm doing this knowing 'full-well the Buffet advice and the last 20 years for performance numbers! Why? I don't want to ever think about rebalancing and I'm super happy to just buy this pair and literally never sell it and hopefully retire off the dividends alone someday.

You could also make this same "last 20 years performance" argument if you looked at Long term bonds -- but I'm not sure I recommend buying them now either....

Sounds to me like you may want to make SP-500 your only future equity buy and perhaps also make stocks a higher percentage of your AA.... rebalancing blues are the worst...don't fall into it!!
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Re: Thinking of Dropping Out of International Stock Funds

Post by Bud »

Do you own the S&P 500?

Revenue from outside the United States across the index is about 30%. Other sources quote it as high as 45%. Depending on what type of International diversification you want, a broadly diversified portfolio achieves it without any international index funds.

https://seekingalpha.com/article/414699 ... -and-p-500
https://insight.factset.com/sp-500-comp ... owth-in-q1

some examples...
Coca Cola is 47% international sales/53% domestic
Apple is 67% international/ 33% domestic

All the best...
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Re: Thinking of Dropping Out of International Stock Funds

Post by Fudgie »

lostdog wrote: Tue Jul 27, 2021 11:04 pm "Over the past 70 years the US stock market has been a darling, outperforming foreign stocks by 1% per year.

$10k invested in US stocks in 1950 turned into $14 million vs. only $8m in foreign stocks.

Want to know how much of that outperformance has come since 2009?

All of it"

-Meb Faber

Source: https://twitter.com/MebFaber/status/1120390142496247812
:sharebeer
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Re: Thinking of Dropping Out of International Stock Funds

Post by wander »

Op, I am on the same boat as you but even though the US stock funds have carried our portfolio to FI, so I wouldn't be worried too much about dropping international stock funds. At least I got 60% correct, which is the main reason of diversifying.
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Re: Thinking of Dropping Out of International Stock Funds

Post by nps »

JBTX wrote: Tue Jul 27, 2021 4:58 pm Correlated short term or long term? If there is a huge discrepancy in long term performance that implies at least some lack of long term correlation.
A lack of perfect correlation maybe. It's possible to be long term positively correlated and still have huge discrepancy in performance.
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Re: Thinking of Dropping Out of International Stock Funds

Post by Visitor76 »

Triple digit golfer wrote: Tue Jul 27, 2021 2:47 pm
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?
I meant that International stocks are not correlated to US stocks in a way that bonds usually are.
Wealth is not about having a lot of money; it's about having a lot of options.
Visitor76
Posts: 326
Joined: Tue Mar 17, 2020 7:08 am

Re: Thinking of Dropping Out of International Stock Funds

Post by Visitor76 »

JBTX wrote: Tue Jul 27, 2021 2:50 pm
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?
I meant to say that International provides no correlation to US stocks in the way that bonds usually do when the US market is down. And on top of that they have proven to be a drag on any portfolio looking for maximum growth of capital.
Wealth is not about having a lot of money; it's about having a lot of options.
chazas
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Joined: Wed Nov 01, 2017 1:22 pm
Location: NoVa

Re: Thinking of Dropping Out of International Stock Funds

Post by chazas »

It’s depressing but if I followed all these threads I’d be 100% US equities, because, you know, bonds are worthless too.

Except on a day like yesterday where they were the only bit of green and performed their function admirably. :happy

I think I’ll just stay the course.
Willmunny
Posts: 208
Joined: Mon Jun 16, 2014 6:35 pm

Re: Thinking of Dropping Out of International Stock Funds

Post by Willmunny »

Gold was $275 per ounce in 2001. It is roughly $1800 today. That's a nice return over 20 years. Why bother with US stocks when you get 20 year returns like this? :wink:
Triple digit golfer
Posts: 10430
Joined: Mon May 18, 2009 5:57 pm

Re: Thinking of Dropping Out of International Stock Funds

Post by Triple digit golfer »

Visitor76 wrote: Wed Jul 28, 2021 6:41 am
Triple digit golfer wrote: Tue Jul 27, 2021 2:47 pm
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?
I meant that International stocks are not correlated to US stocks in a way that bonds usually are.
I agree, and that is to be expected. So you sold them and bought bonds instead?
Willmunny
Posts: 208
Joined: Mon Jun 16, 2014 6:35 pm

Re: Thinking of Dropping Out of International Stock Funds

Post by Willmunny »

chazas wrote: Wed Jul 28, 2021 6:51 am It’s depressing but if I followed all these threads I’d be 100% US equities, because, you know, bonds are worthless too.

Except on a day like yesterday where they were the only bit of green and performed their function admirably. :happy

I think I’ll just stay the course.
This forum is comprised of human beings. Human beings often have a recency bias. As a long time reader of this forum, I remember posts from 2008 - 2012 regarding professor Zvi Bodie and discussing whether stocks were just too risky for your average Joe investor. Now, you are more likely to see a post from someone who is 90/10 with hand-wringing about the lost opportunity cost/poor performance of that 10% fixed income component.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Thinking of Dropping Out of International Stock Funds

Post by nigel_ht »

lostdog wrote: Tue Jul 27, 2021 11:04 pm "Over the past 70 years the US stock market has been a darling, outperforming foreign stocks by 1% per year.

$10k invested in US stocks in 1950 turned into $14 million vs. only $8m in foreign stocks.

Want to know how much of that outperformance has come since 2009?

All of it"

-Meb Faber

Source: https://twitter.com/MebFaber/status/1120390142496247812
I dunno, my opinion of folks writing books via Twitter generally goes down…

It’s also complete bunk.

Image

US and international out performs one another in streaks.

Not some nonsense that international has outperformed the US until 2009.

And the most interesting chart he posted is this one:

Image

So it implies that equal weight is still hammered by the US market AND we’ve already survived one of the worst case scenario short of ceasing to exist (Russia) while outperforming international.

Moreover he goes on to say that no one country outperforms and posts this chart:

Image

Gee…which country is poking above global equal weight?

Turkey, Egypt and Russia are cheap today…if you want to go equal weight into these countries…enjoy yourself.

Will we underperform again? Yes. So what? It doesn’t mean that we should go overweight international.
atdharris
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Joined: Wed Jan 02, 2019 2:18 pm

Re: Thinking of Dropping Out of International Stock Funds

Post by atdharris »

You assume this type of risk when buying ex-US funds. I expect them to be more volatile than US funds. The China stuff is concerning, but that's why I don't own individual Chinese companies or Chinese ETFs.
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