Bogleheads/Investment sub in Reddit claim that : - all US is absolutely a recency bias (due to recent strong investment performance from US) and not truly diversified investment strategy. - It is said US and international take turns and outperform each other, and there have been periods that US performance has been absolutely flat (2000-2010) with even negative returns where international had stellar growth. Skipping international altogether would mean missing out an opportunity to buy them cheap and miss potential growth. - All research from Vanguard, Fidelity emphasize on having international and all their managed investment portfolio have 30-40% international allocation aligning with global market cap Will everyone start chasing international once it throttle or will US continue to dominate next decade too?
100% in US
I’m personally pretty heavy on China at least in the short/medium term. They haven’t recovered from Covid really at all and they just passed a huge stock market bailout.
Depends on your time horizon. For retirement, probably fine since US stock valuations aren't too ridiculous. At worst we might get a decade to decade and half of lower returns but as time horizon is longer, returns tend to converge to a medium.
US equities are over valued. International diversification is critical, especially given the long term negative outlook (massive debt for starters)
Trust us economy - buffet
I am all Fxaix
Check the performance from 2001 to 2010, FXAIX had very poor performance with cumulative growth of 1.5% whereas EX-US has had close to 6% for the same time period. What will you do if there is similar poor performance from US and strong performance from EX-US for another two decades from today? Wouldn't the retirement be totally screwed? Does it not make a case for diversification with international?
I've done FXAIX *only* for my 401k And personal investments for 10 years. Look at FXAIX's graphs... Including since inception. I rest my case.
I checked from 2001 to 2010, FXAIX had very poor performance with cumulative growth of 1.5% whereas EX-US has had close to 6% for the same time period. Isn't what you are describing classic recency bias? What will you do if there is similar poor performance from US and strong performance from EX-US for another two decades from today? How can you so confident that US would have similar performance when it has poorly performed in the past?
2001 is recency bias? Nobody has a crystal ball. Not saying I wont change my strategy up but has very low fees and has always performed well. How did you get those specific dates?
I have had US and Asian equities for over 10 years. My Asian folio used to be able 40-50% of my total. It’s now down to 7% due to crappy performance and the success of my US equities. If I had been 100% in US from the start, my NW would be 8 digits now and can definitely Fat-FatFIRE.
This .. warren buffet says the same
It’s fine to go 100% US. John Bogle himself did only US IIRC. Same with Warren buffet
This - great one rare sane advice