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How much should I invest in international mutual funds in my 401k?
Posted on 4/30/24 at 5:29 pm
Posted on 4/30/24 at 5:29 pm
I’m looking to get out of my target date fund and do an 80/20 stocks/bonds split, as recommended by a financial planner. Currently my investment mix is large cap equity funds (currently 45% of my portfolio), mid/small cap equity (16%), international equity (18%), stable value (10%), bonds (10%), and company stock (1%).
I’m about 14 years from retirement so I’m looking for a moderate risk level. The target date fund I was in had about 10% in bonds and 30% in international stocks. Is 18% about right or do I need to change it? What about my portfolio mix in general for a moderate risk level?
Thanks for any advice. I’ve been spending months trying to learn more about the financial markets so I can make sure I retire comfortably and make my money work for me instead of working for money.
I’m about 14 years from retirement so I’m looking for a moderate risk level. The target date fund I was in had about 10% in bonds and 30% in international stocks. Is 18% about right or do I need to change it? What about my portfolio mix in general for a moderate risk level?
Thanks for any advice. I’ve been spending months trying to learn more about the financial markets so I can make sure I retire comfortably and make my money work for me instead of working for money.
This post was edited on 4/30/24 at 5:31 pm
10
Posted on 4/30/24 at 6:06 pm to Bourre
I would invest 0% in international mutual funds. I've never seen the need. It was a product made to sell in the name of diversification.
Posted on 4/30/24 at 6:14 pm to Bourre
My plan offers S&P 500, small cap, international, and bond funds.
I look at the mix in their target date funds to make sure I'm not too out of whack with what the "experts" recommend for someone at my point. The target date fund has more international than small cap, but over the last 20 years or so the small cap fund has almost always outperformed international.
Accordingly, I put most of my stock money in 500, less in small cap, and a very small amount in the international fund.
I look at the mix in their target date funds to make sure I'm not too out of whack with what the "experts" recommend for someone at my point. The target date fund has more international than small cap, but over the last 20 years or so the small cap fund has almost always outperformed international.
Accordingly, I put most of my stock money in 500, less in small cap, and a very small amount in the international fund.
Posted on 4/30/24 at 6:15 pm to Bourre
International is frustrating. If you avoid it altogether, you’re missing out on the only company in the world that makes the machines that make high-end chips (ASML), the two largest chip manufacturers in the world (TSMC and Samsung) and the only large-bodied airline manufacturer that isn’t Boeing (Airbus). Unfortunately financials are a decent size of most international indexes and you can argue that you get enough international economic sensitivity from US stocks already.
That being said, I just rebelanced my 401k to 10% in an international index. It’s enough to matter but not enough to highly skew my performance.
That being said, I just rebelanced my 401k to 10% in an international index. It’s enough to matter but not enough to highly skew my performance.
Posted on 4/30/24 at 6:32 pm to Bourre
I’m focused on domestic market since more globalization now. Get diversified because of multinationals.
I wouldn’t put more than 10% at most. Probably 5%
I wouldn’t put more than 10% at most. Probably 5%
Posted on 4/30/24 at 6:33 pm to slackster
It's been a while since international has provided any lift to a portfolio but I just know the minute I go 100% home biased to the US it will go on a 25 year win streak.
Posted on 4/30/24 at 7:35 pm to RoyalWe
International dominated for about a decade before QE started. Tough to say that was a marketing gimmick.
That said, you would’ve been better off without it since 2010. There will be a day it will dominate again just like nasdaq has. The fact that we hate it may be a contrarian indicator in and of itself.
I wouldn’t go higher than 10% now unless you have a really good option there.
That said, you would’ve been better off without it since 2010. There will be a day it will dominate again just like nasdaq has. The fact that we hate it may be a contrarian indicator in and of itself.
I wouldn’t go higher than 10% now unless you have a really good option there.
Posted on 4/30/24 at 7:38 pm to Bourre
quote:
I’m looking to get out of my target date fund
Posted on 4/30/24 at 8:15 pm to Bourre
Investing in the broad US market effectively gives you plenty of international exposure. If you devote something to international, make it a small amount.
Posted on 4/30/24 at 9:44 pm to UpstairsComputer
quote:Again, why bother? Keep it simple.
I wouldn’t go higher than 10% now unless you have a really good option there.
Posted on 4/30/24 at 9:55 pm to RoyalWe
Zero. After 10 years investing in emerging markets, I lost 8K. If I put it in a Vanguard Fund, I’d average 12% gain a year.
Posted on 5/1/24 at 8:00 am to Bourre
Thanks everyone. I didn’t know if 18% was high for an international fund but I definitely knew that 30% was high in the target date fund
Posted on 5/1/24 at 8:27 am to Teddy Ruxpin
US equities are very expensive compared to international though
Posted on 5/1/24 at 8:31 am to Bourre
I was on the fence 2 years ago about investing anything in international, but someone on this board convinced me to put 15% towards those funds. I split it 7.5% Vanguard International Growth and 7.5% Vanguard International Index. I feel like they are both undervalued at the moment, and the US economy is on a house of cards.
Posted on 5/1/24 at 8:49 am to Crescent Connection
Agreed; a US recession though would likely affect international equities too… we’re the ones buying those semiconductors
Posted on 5/1/24 at 8:55 am to Bourre
As others have said, at least 10% international would be right for most people.
You could look at VT as well. That’s the total world stock market. I think it’s roughly 35% international currently.
If you are going to target international index funds, I would lean towards emerging markets and avoid Europe. European business is going to die without cheap Russian gas and the EU over regulates everything. I’d also think about whether you want to avoid China. They cutdown their most successful companies when they become too powerful. See Alibaba.
You could look at VT as well. That’s the total world stock market. I think it’s roughly 35% international currently.
If you are going to target international index funds, I would lean towards emerging markets and avoid Europe. European business is going to die without cheap Russian gas and the EU over regulates everything. I’d also think about whether you want to avoid China. They cutdown their most successful companies when they become too powerful. See Alibaba.
Posted on 5/1/24 at 9:21 am to Bourre
I am doing the "Milei Trade" and investing in Argentina. Not doing funds but individual stocks. Not making a big investment but this does give me some international exposure.
Posted on 5/1/24 at 12:12 pm to frogtown
quote:Now this is something worth considering. Thanks for the thought.
I am doing the "Milei Trade" and investing in Argentina.
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