Vanguard ... what y'all thinkin?

Vanguard what? They're probably the biggest fund company out there, they have 30 bajillion different funds.

But they're usually pretty well-run, there's a reason they got big after all. So maybe I should just say keep it in whatever Vanguard fund you picked.

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Obviously disturbed, the President then asked, "How many soldiers in a Brazillian?"

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:rimshot:

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Legal tender of some foreign coinage made of silver seems a possible hedge against falling dollar - that would be easy to establish a price for.

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There are much better ways. For example, buy Vanguard's international stock (or bond) index, the one that is not hedged against the dollar.

You earn interest and dividends, which silver coins do not. When or if you decide to sell, you don't get raped by outrageous bid/ask spreads. Finally, if you make sure to get the non-dollar version you have no problems with a falling dollar. In fact, you welcome it.

Look at VEU, the all world ex-US ETF or it's index fund offering, and you would pick up large foreign companies in developed and emerging markets in one holding. From the past posts you seem pretty conservative, if you do not want emerging market exposure and seek larger company exposure you might look at IOO, which is the ishares Global 100 company ETF and is currently ~ 45/55 US/international exposure. VEU should be the stronger performer over time, but nothing is guaranteed. IOO was a steal back in March when the dividend was ~ 4.5%. If taxes are an issue you might want to wait until the ex-dividend dates on whatever you choose to invest in if in a taxable account.

For disclosure I own both. YMMV.

VEU


IOO

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Legal tender of some foreign coinage made of silver seems a possible hedge against falling dollar - that would be easy to establish a price for.

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Please elaborate on that.

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Look at VEU, the all world ex-US ETF or it's index fund offering

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I have a fairly large holding in VGTSX, the fund equivalent of VEU.

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Question 1: Will VEU hedge against a falling dollar (I'm not bunker guy, but 5% of the portfolio could move from cash to something).

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It's holdings are unhedged, ie return would be generated in the currencies of the countries of origin, which would float against the dollar. But this might only provide minimal hedging support when compared to potential losses if VEU took a 20-30% hit in value. Maybe you could consider 2-5 buys over 6-months or so to try to reduce volatility risk. The actual index fund version of VEU foshizzle referenced might make more sense in this regard unless you have very low cost commissions. You can convert the fund to an ETF later through Vanguard if desired. From a negative correlation perspective the international fund makes more sense than buying domestic, or if you want to go to an extreme and lower the potential equity holding amount look at VSS, but it still is a valuation challenge to buy in.

World market cap

The scenario you raise about buying at a peak price is one reason I agree with the Ben Graham 25%-75% range of equity allocation at all times. When the market is richly valued hold a lower allocation, when at low valuations hold higher amounts. If I completely exited I would struggle to buy back in and would probably be late to the party. If you have significant assets and don't need to maximize return a lower equity allocation makes a lot of sense.

For disclosure I am currently 65/35 domestic/international and, including collateralized commodities futures exposure with equity am 40/60 equity/fixed income + cash. I sold approximately 30% of my holdings in VEU, VWO and VSS over the past 3-months and still have a significant amount of $ in those ETF's, ~ close to 6 figures. Part of it was to dial back emerging market exposure which had gotten beyond my comfort level and to lock in gains.

Again, YMMV, but I think longer term what you are considering makes sense given your other fixed income holdings. The question remains as to whether earnings will improve over the next 12-24 months, which could result in current pricing being attractive. I wish I knew the answer.

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that's precisely why you do not want the dollar-hedged version. If you get the dollar-hedged version then you are exposed to fluctuations in the value of the dollar vs. other currencies.

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Perhaps I shouldn't of used the term 'hedge.'

Concl: all other factors being equal, dollar does badly, VEU & VGTSX do well?

Exactly. A lot of mutual funds with foreign stock holdings employ a currency hedge so that you aren't exposed to currency fluctuations. These particular Vanguard holdings do not have this hedge, and I think that is desirable, not because I'm bearish on the dollar but just for better overall currency diversification.

Vanguard offers dollar-hedged versions as well, I just didn't choose them that's all. I believe Pimco offers an international bond fund that is not dollar-hedged, I don't remember which one.

Along those lines, how about making it easy for you to manage. Consider VTWSX, the total world index fund, and if you want to pick up additional expected risk/return exposure consider adding smaller company exposure. Look at VEXMX, the US extended market index which would pick up domestic small and mid-cap exposure, and VFSVX, the all world ex-US small cap fund.

Your portfolio would gain exposure to a breadth of domestic and international markets including emerging large and small market cap with the international holdings offering some currency diversification. That would give you exposure to multiple market caps and some exposure to equity sectors with higher expected returns in a simple to manage 3-fund equity portfolio. If you became concerned about too much/too little international holdings in the future you could rebalance by adding the fund equivalent of VTI or VEU.

VGD index funds

One strategy risk averse investors with significant assets can consider is to plan to make 5-6 purchases of whatever securities fit the plan. Make purchase 1, then if the holding goes up over 4 weeks make purchase 2 and continue. If the asset declines in value quit buying until it starts going up again. This can help keep you from trying to catch a falling knife as you are seeking return on assets in addition to return of assets compared to investors who may have chased the market all the way down in 2008 or 2009. Holding cash is not bad, at least you will not be losing 20-40% on invested cash. With the bulk of the portfolio earning 5% tax free patience should be in ample supply.

Just things to think about. YMMV and I am not giving advice, just info to take back to whomever you are using for portfolio management.