VXUS vs VTI -- why invest in VXUS?

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Marseille07
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

visualguy wrote: Thu Sep 22, 2022 12:23 am No need for guessing. The new empire of Atlantis or whatever it ends up being isn't coming in our lifetime. Empires don't suddenly materialize out of thin air. We're stuck with the countries we have, and no US alternative. Empire lifecycles are long, while human life is short. A future generation may see a different world, but not us. For our generation, do it the Bogle way - VTI and chill.
The only caveat is that the US-only folks (myself included) might not jump ship and hop onto the new empire of Atlantis. That's what's tricky about being US-only.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by visualguy »

Marseille07 wrote: Thu Sep 22, 2022 12:26 am
visualguy wrote: Thu Sep 22, 2022 12:23 am No need for guessing. The new empire of Atlantis or whatever it ends up being isn't coming in our lifetime. Empires don't suddenly materialize out of thin air. We're stuck with the countries we have, and no US alternative. Empire lifecycles are long, while human life is short. A future generation may see a different world, but not us. For our generation, do it the Bogle way - VTI and chill.
The only caveat is that the US-only folks (myself included) might not jump ship and hop onto the new empire of Atlantis. That's what's tricky about being US-only.
Good point - I'll make sure to tell my grandchildren when they're born to tell their grandchildren to watch out for Atlantis and make sure they get in on the action in time! :wink:
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Re: VXUS vs VTI -- why invest in VXUS?

Post by invest4 »

I am 80/20 VTI/VXUS

I do it to provide some diversification and is ok for me to buy during a period where it has lagged US.

I often see investments largely ignored for periods of time which then have a change in fortune. People then pile in to participate, but those who had been accumulating over time were already well positioned, having bought consistently over time.

Of course, the wait could be long and you may wish you had chosen differently in hindsight, but I try to diversify and not chase performance too much and let the future unfold.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by roth evangelist »

There is no VTI v. VXUS. They're not comparable. You own both of them if you want a diversified portfolio. It's that simple.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Tamalak »

pappupager wrote: Wed Sep 21, 2022 10:31 am I am 75-15-10 (VTI/VXUS/BND). Looking at VXUS specifically, the price has been the same in 2012 vs 2022, while during the same duration, VTI has quadrupled. No one has the crystal ball, and past performance is no indicator of the future, but why does everyone push heavily for VXUS as a counter for VTI? I would like a counter that has been profitable over a long duration of time.

Thoughts?
The price may be the same. But I also factor in
1. Dividends (as mentioned in this topic elsewhere)
2. Adjustments in P/E (If a company makes 10% and the P/E drops 10%, the stock price remains the same but the underlying company is still making money)
3. Adjustments in dollar strength (if a French company makes 10% but the dollar strengthens 10%, the stock price remains the same but the underlying company is still making money).

Factoring all three of these in, I get about 6% annualized for VXUS since 2012, despite the same price. Making the same adjustments for VTI (minus dollar strength of course) gives 9%.

Companies around the world are making money. How soon that underlying return is reflected in the market is unpredictable.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by enad »

pappupager wrote: Wed Sep 21, 2022 10:31 am I am 75-15-10 (VTI/VXUS/BND). Looking at VXUS specifically, the price has been the same in 2012 vs 2022, while during the same duration, VTI has quadrupled. No one has the crystal ball, and past performance is no indicator of the future, but why does everyone push heavily for VXUS as a counter for VTI? I would like a counter that has been profitable over a long duration of time.

Thoughts?
If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”

You can read the entire article here.

Jack also said: Financial history is important, and studying historical rates of returns provides useful perspectives. But beware of concluding too much from the past returns in the financial markets. Beware or past returns for periods that seem long enough but are not.

so while Portfolio Visualizer is a great tool for looking at the past it cannot be used to predict the future (but it won't stop people from trying to). Hope this helps you decide.

In another article https://www.cnbc.com/2015/10/14/jack-bo ... -rest.html, it states:
Bogle doesn’t invest overseas — at least, not directly.

Bogle famously keeps his portfolio entirely in U.S. markets. This isn’t because he’s U.S.-centric: In fact, he pointed out the inconsistency of even calling the rest of the world “international.” He just believes in placing bets based on what he knows, and “we have the best investor protections and legal institutions,” he said. Many large U.S. companies derive 50 percent or more of their revenue from outside the United States, so buying a fund comprising the U.S. market de facto gives you exposure to international markets. For instance, New York City-based Colgate-Palmolive had only 18 percent of its net sales in the North American market in 2014.

I am retired with a 60/40 Jack Bogle 2-Fund portfolio which you can read all about here: viewtopic.php?t=188176, I get international exposure although many would say it's not the same as diversification (see above).

Best Wishes
Last edited by enad on Thu Sep 22, 2022 10:44 am, edited 1 time in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by homebuyer6426 »

What is the average real return of ex-US? US is about 7%. I can't find international data that goes back far enough. Standard deviation would be helpful too.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

visualguy wrote: Thu Sep 22, 2022 2:00 am Good point - I'll make sure to tell my grandchildren when they're born to tell their grandchildren to watch out for Atlantis and make sure they get in on the action in time! :wink:
Well it is a metaphor as you probably know. The point is that if US is going to decline for good (kind of like the UK) and there are some up-and-coming nations out there, we might sink with the US rather than jumping out of it.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by strummer6969 »

Marseille07 wrote: Thu Sep 22, 2022 9:58 am
visualguy wrote: Thu Sep 22, 2022 2:00 am Good point - I'll make sure to tell my grandchildren when they're born to tell their grandchildren to watch out for Atlantis and make sure they get in on the action in time! :wink:
Well it is a metaphor as you probably know. The point is that if US is going to decline for good (kind of like the UK) and there are some up-and-coming nations out there, we might sink with the US rather than jumping out of it.
Sometimes I sense a hint of patriotism in these international threads. To be clear, those who invest in international aren't "betting against the U.S." or at least I'm not. To the contrary I hope we maintain our position forever. But it's in a range of possibilities that may not occur. I have a life insurance policy, not because I'm betting against myself.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

strummer6969 wrote: Thu Sep 22, 2022 10:25 am Sometimes I sense a hint of patriotism in these international threads. To be clear, those who invest in international aren't "betting against the U.S." or at least I'm not. To the contrary I hope we maintain our position forever. But it's in a range of possibilities that may not occur. I have a life insurance policy, not because I'm betting against myself.
Those investing in international aren't "betting against the U.S." However, the US-only camp isn't performance-chasing either, unless they're shifting back and forth.
Last edited by Marseille07 on Thu Sep 22, 2022 10:40 am, edited 2 times in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by lostdog »

Marseille07 wrote: Thu Sep 22, 2022 10:27 am
strummer6969 wrote: Thu Sep 22, 2022 10:25 am Sometimes I sense a hint of patriotism in these international threads. To be clear, those who invest in international aren't "betting against the U.S." or at least I'm not. To the contrary I hope we maintain our position forever. But it's in a range of possibilities that may not occur. I have a life insurance policy, not because I'm betting against myself.
People make crazy accusations. When I called where the Ten would be, I was told that I'm ridiculing everyone buying bonds.
What's the difference between single stock picking, picking sectors and picking countries?
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

lostdog wrote: Thu Sep 22, 2022 10:33 am What's the difference between single stock picking, picking sectors and picking countries?
Is this a serious question? I don't want to sound rude, but I fail to see why you don't see the differences.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

enad wrote: Thu Sep 22, 2022 9:51 am If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”
With all due respect to Jack, statements like this suggest that he didn't really understand the concept of diversification especially well.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

Marseille07 wrote: Thu Sep 22, 2022 10:41 am
lostdog wrote: Thu Sep 22, 2022 10:33 am What's the difference between single stock picking, picking sectors and picking countries?
Is this a serious question? I don't want to sound rude, but I fail to see why you don't see the differences.
Because there is no difference.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by strummer6969 »

Marseille07 wrote: Thu Sep 22, 2022 10:27 am
strummer6969 wrote: Thu Sep 22, 2022 10:25 am Sometimes I sense a hint of patriotism in these international threads. To be clear, those who invest in international aren't "betting against the U.S." or at least I'm not. To the contrary I hope we maintain our position forever. But it's in a range of possibilities that may not occur. I have a life insurance policy, not because I'm betting against myself.
Those investing in international aren't "betting against the U.S." However, the US-only camp isn't performance-chasing either, unless they're shifting back and forth.
Agreed. Not to belabor the point, but also U.S. corps shift jobs overseas and we still invest in them. The typical U.S. consumer buys most of their goods made outside the U.S. It seems silly to me that a portfolio would lack any international exposure. The only convincing argument against owning international is that you do get international exposure by owning U.S. multinational corporations. It is a valid point today.

I can see both sides of it and I settled on 25%.

But as usual, these U.S. vs. Int'l threads end up going nowhere.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

strummer6969 wrote: Thu Sep 22, 2022 10:50 am Agreed. Not to belabor the point, but also U.S. corps shift jobs overseas and we still invest in them. The typical U.S. consumer buys most of their goods made outside the U.S. It seems silly to me that a portfolio would lack any international exposure. The only convincing argument against owning international is that you do get international exposure by owning U.S. multinational corporations. It is a valid point today.

I can see both sides of it and I settled on 25%.

But as usual, these U.S. vs. Int'l threads end up going nowhere.
I actually don't buy that argument because as much as the US companies making money abroad, international companies make money in the US as well.

Imo the point isn't making money abroad, but how much you make in total. That's pretty much the bottom line - as this is all about the earnings growth at the end of the day.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by enad »

vineviz wrote: Thu Sep 22, 2022 10:44 am
enad wrote: Thu Sep 22, 2022 9:51 am If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”
With all due respect to Jack, statements like this suggest that he didn't really understand the concept of diversification especially well.
Did you read the article?

3. To Bogle, diversification means bonds — and it doesn’t need to mean anything more than that.

If you are perfectly comfortable with risk, you’d put your asset allocation into a 100 percent stock portfolio and keep it there until you die, because historically, that’s the kind of asset that has produced the best returns over the longest period of time. But an all-equity portfolio in 2007–09 would have been a disaster, a point Bogle made in his book “Common Sense on Mutual Funds.” Your portfolio would have recovered eventually, but what if you needed the money during that time span?


Bogle uses bonds to leaven equity risk in his portfolio. He’s comfortable with a simple portfolio, increasing the bond allocation as he ages, because he wants to reduce the risk of a sudden, massive drop in value.


Best Wishes
Last edited by enad on Thu Sep 22, 2022 11:02 am, edited 1 time in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by abuss368 »

vineviz wrote: Thu Sep 22, 2022 10:45 am
Marseille07 wrote: Thu Sep 22, 2022 10:41 am
lostdog wrote: Thu Sep 22, 2022 10:33 am What's the difference between single stock picking, picking sectors and picking countries?
Is this a serious question? I don't want to sound rude, but I fail to see why you don't see the differences.
Because there is no difference.
Hi Vince -

I would suspect the degree of risk assumed and the expected return is the difference.

Best.
Tony
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

vineviz wrote: Thu Sep 22, 2022 10:45 am Because there is no difference.
If Americans living in the US watch the Major League Baseball, did they pick the MLB over the K-League of South Korea?

That's how absurd this argument of "picking countries" sounds like.
Last edited by Marseille07 on Thu Sep 22, 2022 11:26 am, edited 1 time in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by arcticpineapplecorp. »

I let George Sistri explain it (source: https://oncoursefp.com/files/Vectors_June_19_final.pdf)

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Re: VXUS vs VTI -- why invest in VXUS?

Post by lostdog »

Marseille07 wrote: Thu Sep 22, 2022 11:17 am
vineviz wrote: Thu Sep 22, 2022 10:45 am Because there is no difference.
If Americans living in the US watch the Major League Baseball, did they pick the MLB over the K-League of Korea?

That's how absurd this argument of "picking countries" sounds like.
What if you lived in the UK? Would you be an all UK index? Are you saying the USA is special?
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

lostdog wrote: Thu Sep 22, 2022 11:24 am What if you lived in the UK? Would you be an all UK index? Are you saying the USA is special?
I'd probably hold domestic & US equities, but I'm just speculating what I might do.

But you bring up a good point. If foreign investors investing in the US is "special" then we are, since far more foreign investors invest in the US than the other way around.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

enad wrote: Thu Sep 22, 2022 11:01 am Did you read the article?

3. To Bogle, diversification means bonds — and it doesn’t need to mean anything more than that.
Yes, and that second sentence reinforces my conclusion.

I admire Bogle, but he had some blindspots. And this was one of them.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by lostdog »

Marseille07 wrote: Thu Sep 22, 2022 11:28 am
lostdog wrote: Thu Sep 22, 2022 11:24 am What if you lived in the UK? Would you be an all UK index? Are you saying the USA is special?
I'd probably hold domestic & US equities, but I'm just speculating what I might do.

But you bring up a good point. If foreign investors investing in the US is "special" then we are, since far more foreign investors invest in the US than the other way around.
Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by enad »

vineviz wrote: Thu Sep 22, 2022 11:29 am
enad wrote: Thu Sep 22, 2022 11:01 am Did you read the article?

3. To Bogle, diversification means bonds — and it doesn’t need to mean anything more than that.
Yes, and that second sentence reinforces my conclusion.

I admire Bogle, but he had some blindspots. And this was one of them.
Then we'll just have to agree to disagree.

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Re: VXUS vs VTI -- why invest in VXUS?

Post by visualguy »

Marseille07 wrote: Thu Sep 22, 2022 11:37 am
lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
That's not what I'm saying. My approach has always been to stick to US indexing for my stock investment, and this will continue to be the case. I consider ex-US indexing to be a terrible investment. For diversification, I hold direct real estate, not foreign-listed stocks.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

Marseille07 wrote: Thu Sep 22, 2022 11:37 am
lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

vineviz wrote: Thu Sep 22, 2022 11:50 am You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
Except that I'm not trying to outmaneuver anything. I've been US-only except when I started 401K with a TDF which carried some international. I eliminated that long ago.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by abuss368 »

vineviz wrote: Thu Sep 22, 2022 11:50 am
Marseille07 wrote: Thu Sep 22, 2022 11:37 am
lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
I used to tell myself I was a long time ago when pouring over annual reports, listening to conference calls, reading everything I could, subscribing to investment newsletters. I thought I was a Gordon Gekko in the making!

Only then did I move back to Vanguard and begin to better educate myself on investing.

Best.
Tony
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Tamalak »

vineviz wrote: Thu Sep 22, 2022 11:50 am
Marseille07 wrote: Thu Sep 22, 2022 11:37 am
lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
What is more nimble than an individual investor? Isn't a ton of the market cap managed by institutions and managers of other peoples' money who would have a lot more professional restrictions than individuals.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by enad »

vineviz wrote: Thu Sep 22, 2022 11:50 am
Marseille07 wrote: Thu Sep 22, 2022 11:37 am
lostdog wrote: Thu Sep 22, 2022 11:31 am Good point.

Bogleheads that are diversified aren't willing to take the risk that the US will be "special" for their investing lifetime.
What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
This is pointless. You pick a strategy that you like and that let's you sleep. Somebody else picks one that let's them asleep and then those who disagree are so upset that other's can't see their way of thinking. I think the best answer is whatever makes you sleep at night. You may not enjoy the same returns but that's life.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

Marseille07 wrote: Thu Sep 22, 2022 11:55 am
vineviz wrote: Thu Sep 22, 2022 11:50 am You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
Except that I'm not trying to outmaneuver anything. I've been US-only except when I started 401K with a TDF which carried some international. I eliminated that long ago.
Let me recall the statement to which I was replying.
Marseille07 wrote: Thu Sep 22, 2022 11:37 am What visualguy and I are saying is that, should our downfall be apparent, we can jump ship then (the tricky part is if we *will* in hopes of the US making a comeback).

Betting on the underdog preemptively is generally a bad move.
1) Thinking your "downfall" will be "apparent" early enough that you can "jump ship then" is nothing if not thinking you can outmaneuver other investors.

2) Thinking you (and only you) can see who is the "underdog" is nothing if not thinking you are capable of outsmarting other investors.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by enad »

Marseille07 wrote: Thu Sep 22, 2022 11:55 am
vineviz wrote: Thu Sep 22, 2022 11:50 am You know what's a REALLY bad move? Thinking you are smart enough and nimble enough to outmaneuver a world full of market participants who are smarter and more nimble than you are.
Except that I'm not trying to outmaneuver anything. I've been US-only except when I started 401K with a TDF which carried some international. I eliminated that long ago.
I think its admirable that you picked a strategy and you're sticking with. Other's will surely disagree with you and your thinking and go out of their way to tell you are wrong. But how does anyone know they are right? Whatever makes you sleep at night is the best answer for you and whatever makes others sleep at night is the best answer for them. It's that simple. Since joining this forum the debate between US and ex-US, US and SCV factor not factor, etc ... is intense. In the words of Rodney King, can't we all just get a long?
Last edited by enad on Thu Sep 22, 2022 12:09 pm, edited 1 time in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by burritoLover »

Going US-only is a valid choice if you want to accept the risks inherent to investing in a single country. But when it is couched in the idea that you can get out if the US starts a long-term decline (as if there's a flashing neon sign saying GET OUT NOW - NEXT 30 YEARS WILL SUCK!) or get into international if it is poised to take off is beyond laughable.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

burritoLover wrote: Thu Sep 22, 2022 12:09 pm Going US-only is a valid choice if you want to accept the risks inherent to investing in a single country. But when it is couched in the idea that you can get out if the US starts a long-term decline (as if there's a flashing neon sign saying GET OUT NOW - NEXT 30 YEARS WILL SUCK!) or get into international if it is poised to take off is beyond laughable.
Numerous posters already gave you pointers where the rise of Japan was evident as early as 1979 if not earlier. 1979 would not have been too late to hop onto international.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by burritoLover »

Marseille07 wrote: Thu Sep 22, 2022 12:15 pm
burritoLover wrote: Thu Sep 22, 2022 12:09 pm Going US-only is a valid choice if you want to accept the risks inherent to investing in a single country. But when it is couched in the idea that you can get out if the US starts a long-term decline (as if there's a flashing neon sign saying GET OUT NOW - NEXT 30 YEARS WILL SUCK!) or get into international if it is poised to take off is beyond laughable.
Numerous posters already gave you pointers where the rise of Japan was evident as early as 1979 if not earlier. 1979 would not have been too late to hop onto international.
In hindsight everything is obvious.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Ray_McKigney »

whodidntante wrote: Wed Sep 21, 2022 10:56 pm I wonder what Tina Turner is doing right now?
What's she got to do, got to do with this?

:wink:
Last edited by Ray_McKigney on Thu Sep 22, 2022 12:32 pm, edited 2 times in total.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

burritoLover wrote: Thu Sep 22, 2022 12:19 pm In hindsight everything is obvious.
Not sure if I follow. Are you saying that the book in 1979 calling Japan as #1 might not have materialized (i.e. let's say Japan fell in 1982)?
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Re: VXUS vs VTI -- why invest in VXUS?

Post by burritoLover »

Marseille07 wrote: Thu Sep 22, 2022 12:24 pm
burritoLover wrote: Thu Sep 22, 2022 12:19 pm In hindsight everything is obvious.
Not sure if I follow. Are you saying that the book in 1979 calling Japan as #1 might not have materialized (i.e. let's say Japan fell in 1982)?
So some book predicts something about Japan and your position is that it means that any future outperformance of international should be easy to hop on to? There was a popular book called DOW 36,000 published in 1999 calling for it hit that mark by 2004. I guess that didn't work out so well.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Billy C »

vineviz wrote: Thu Sep 22, 2022 10:44 am
enad wrote: Thu Sep 22, 2022 9:51 am If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”
With all due respect to Jack, statements like this suggest that he didn't really understand the concept of diversification especially well.
I hope you are being facetious.

Jack Bogle understood diversification better than any of us which is one of the reasons why he pioneered the first index mutual fund.

He also understood uncompensated risk, which is why he said international investing is completely unnecessary. If an investor is going to accept the additional risk of international investing (currency, political instability, war etc.) then they should be compensated with a higher reward. Jack was very skeptical that international investing would produce a higher return.

Jack first published his advice in 1993 in “Bogle on Mutual Funds” and the financial markets haven’t offered even a hint that he might have been wrong. U.S. has outperformed international by 375% over that span. And it’s done so with less volatility.

Diversification should offer a measure of safety, but international investing has done just the opposite. During the global financial crisis of 2007-09, which was centered in the U.S., foreign stocks should have offered a protective buffer if the diversification argument was correct. Foreign stock fared worse.

Those that followed Mr. Bogle’s advice reaped excellent investment results.
“When there are multiple solutions to a problem, choose the simplest one.” ― John C. Bogle
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

burritoLover wrote: Thu Sep 22, 2022 12:34 pm So some book predicts something about Japan and your position is that it means that any future outperformance of international should be easy to hop on to? There was a popular book called DOW 36,000 published in 1999 calling for it hit that mark by 2004. I guess that didn't work out so well.
Tbh I don't know what we're discussing anymore. I'm just happy holding US-only and I stay the course as I always have.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by burritoLover »

Marseille07 wrote: Thu Sep 22, 2022 12:49 pm
burritoLover wrote: Thu Sep 22, 2022 12:34 pm So some book predicts something about Japan and your position is that it means that any future outperformance of international should be easy to hop on to? There was a popular book called DOW 36,000 published in 1999 calling for it hit that mark by 2004. I guess that didn't work out so well.
Tbh I don't know what we're discussing anymore. I'm just happy holding US-only and I stay the course as I always have.
It's ok.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by strummer6969 »

Billy C wrote: Thu Sep 22, 2022 12:48 pm
vineviz wrote: Thu Sep 22, 2022 10:44 am
enad wrote: Thu Sep 22, 2022 9:51 am If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”
With all due respect to Jack, statements like this suggest that he didn't really understand the concept of diversification especially well.
I hope you are being facetious.

Jack Bogle understood diversification better than any of us which is one of the reasons why he pioneered the first index mutual fund.

He also understood uncompensated risk, which is why he said international investing is completely unnecessary. If an investor is going to accept the additional risk of international investing (currency, political instability, war etc.) then they should be compensated with a higher reward. Jack was very skeptical that international investing would produce a higher return.

Jack first published his advice in 1993 in “Bogle on Mutual Funds” and the financial markets haven’t offered even a hint that he might have been wrong. U.S. has outperformed international by 375% over that span. And it’s done so with less volatility.

Diversification should offer a measure of safety, but international investing has done just the opposite. During the global financial crisis of 2007-09, which was centered in the U.S., foreign stocks should have offered a protective buffer if the diversification argument was correct. Foreign stock fared worse.

Those that followed Mr. Bogle’s advice reaped excellent investment results.
Does the lower P/E of ex-US compensate for that risk? Ex-US P/E was quite high when Bogle wrote that in 1993.

https://www.isabelnet.com/valuation-u-s ... ince-1969/
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

enad wrote: Thu Sep 22, 2022 12:07 pm I think its admirable that you picked a strategy and you're sticking with. Other's will surely disagree with you and your thinking and go out of their way to tell you are wrong. But how does anyone know they are right? Whatever makes you sleep at night is the best answer for you and whatever makes others sleep at night is the best answer for them. It's that simple. Since joining this forum the debate between US and ex-US, US and SCV factor not factor, etc ... is intense. In the words of Rodney King, can't we all just get a long?
We see so many threads of this nature because VXUS isn't performing. It should concern those holding VXUS, but instead of analyzing and addressing that, they start bashing the US, unaware that doing so doesn't solve the VXUS issues, which is the funny part.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by dbr »

Marseille07 wrote: Thu Sep 22, 2022 1:00 pm
enad wrote: Thu Sep 22, 2022 12:07 pm I think its admirable that you picked a strategy and you're sticking with. Other's will surely disagree with you and your thinking and go out of their way to tell you are wrong. But how does anyone know they are right? Whatever makes you sleep at night is the best answer for you and whatever makes others sleep at night is the best answer for them. It's that simple. Since joining this forum the debate between US and ex-US, US and SCV factor not factor, etc ... is intense. In the words of Rodney King, can't we all just get a long?
We see so many threads of this nature because VXUS isn't performing. Which should concern those holding VXUS, but instead of analyzing and addressing that, they start bashing the US instead, unaware that that doesn't solve the VXUS issues, which is the funny part.
I agree. It is one thing to assume US and OUS are different sets of the same thing that have the same prospects but just different timing and actually understanding that they may be different things and one has better prospects than the other. Not that I actually know that is true.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by strummer6969 »

The way I look at it, if I'm buying an investment property, a big part of my profit is how much I pay for it. I could make more profit buying a bunch of cheap dinky properties than I could buying an overpriced fancy one.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

Billy C wrote: Thu Sep 22, 2022 12:48 pm
vineviz wrote: Thu Sep 22, 2022 10:44 am
enad wrote: Thu Sep 22, 2022 9:51 am If it helps you decide. Jack Bogle (as recently as April 29, 2017) said "international investing hasn’t provided much diversification. If you look at the last 10 years, the correlation between EAFE and the U.S. has been something like 92, that doesn’t seem to change your risk.”
With all due respect to Jack, statements like this suggest that he didn't really understand the concept of diversification especially well.
I hope you are being facetious.

Jack Bogle understood diversification better than any of us which is one of the reasons why he pioneered the first index mutual fund.
I was not being facetious.

Jack Bogle understood investors incredibly well, and he made his mark on the industry because of it. We should not impart on him, though, a technical knowledge that he neither had nor - as far as I can tell - aspired to have.
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Re: VXUS vs VTI -- why invest in VXUS?

Post by vineviz »

Marseille07 wrote: Thu Sep 22, 2022 1:00 pm
enad wrote: Thu Sep 22, 2022 12:07 pm I think its admirable that you picked a strategy and you're sticking with. Other's will surely disagree with you and your thinking and go out of their way to tell you are wrong. But how does anyone know they are right? Whatever makes you sleep at night is the best answer for you and whatever makes others sleep at night is the best answer for them. It's that simple. Since joining this forum the debate between US and ex-US, US and SCV factor not factor, etc ... is intense. In the words of Rodney King, can't we all just get a long?
We see so many threads of this nature because VXUS isn't performing. It should concern those holding VXUS, but instead of analyzing and addressing that, they start bashing the US, unaware that doing so doesn't solve the VXUS issues, which is the funny part.
Given how objectively unsuccessful we can see that performance chasing is, I'm not sure it is the VXUS owners who should be concerned.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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Re: VXUS vs VTI -- why invest in VXUS?

Post by Marseille07 »

vineviz wrote: Thu Sep 22, 2022 1:14 pm Given how objectively unsuccessful we can see that performance chasing is, I'm not sure it is the VXUS owners who should be concerned.
Then why would they create a thread like this?
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