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Underperformance of international funds
Posted on 6/7/24 at 12:50 pm
Posted on 6/7/24 at 12:50 pm
The commonly given advice when I started investing was to include 20-30% international in a portfolio to be properly diversified. About 3 years ago, I finally pulled the plug on it because it was such a laggard to the US market. Looking at it now, that certainly hasn’t changed.
Anyone else given up on it?
Anyone else given up on it?
5
Posted on 6/7/24 at 1:19 pm to DrrTiger
20 to 30% is way too high. I’d go with 10 to 15% max. And really, you effectively have lots of international exposure just investing in the broad S&P.
Posted on 6/7/24 at 1:45 pm to DrrTiger
quote:
I started investing was to include 20-30% international in a portfolio to be properly diversified
Do you own exposure to the S&P 500?
Posted on 6/7/24 at 1:46 pm to DrrTiger
The rest of the world can’t print money like we can
Posted on 6/7/24 at 2:00 pm to SloaneRanger
quote:I would say 25-30% is the default for most future date or robo advisor driven retirement funds. I agree with you and OP that it's crazy though. How many times does the S&P have to lap the international markets before people change their baseline. Hell, I'd say the same about small caps at this point.
20 to 30% is way too high. I’d go with 10 to 15% max. And really, you effectively have lots of international exposure just investing in the broad S&P.
We're in the era of the haves and the have nots. The traditional allocation advise is outdated. If small caps, international and value got hot and outperformed mega caps for a year I would use that as an opportunity to completely reset my baseline.
This post was edited on 6/7/24 at 2:03 pm
Posted on 6/7/24 at 2:43 pm to beaverfever
The S&P 500 is an international fund
Posted on 6/7/24 at 4:02 pm to wutangfinancial
quote:That's dominated by large cap US companies.
The S&P 500 is an international fund
Posted on 6/7/24 at 4:20 pm to beaverfever
quote:
That's dominated by large cap US companies.
And 1/3 of their revenues are international
Posted on 6/7/24 at 5:44 pm to DrrTiger
I wouldn’t do more than 5% international
Posted on 6/8/24 at 12:02 am to beaverfever
quote:
I would say 25-30% is the default for most future date or robo advisor driven retirement funds.
Vanguard’s 2050 target retirement is almost 37% international now. They used to advise 25% about 20 years ago.
This post was edited on 6/8/24 at 12:05 am
Posted on 6/8/24 at 5:39 am to DrrTiger
Eventually, there will be a reversion to the mean.
The point of diversification is to have various asset classes performing at different times.
It’s been a good run for US large caps.
They may run further.
Having small caps, international, real estate funds may give some diversification.
The point of diversification is to have various asset classes performing at different times.
It’s been a good run for US large caps.
They may run further.
Having small caps, international, real estate funds may give some diversification.
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