Diversification important as ever

[Retire-Canada]

I'd be more interested in trailing 1 year returns vs. what happened over just 2 months.

1 Year Trailing Returns
VUN [US] = 20%
VCN [CDN] = 20%
VIU [Int'l Dev] = 17%
VEE [Int'l EM] = 21%

[thriftyc]

I'd be more interested in trailing 1 year returns vs. what happened over just 2 months.

1 Year Trailing Returns
VUN [US] = 20%
VCN [CDN] = 20%
VIU [Int'l Dev] = 17%
VEE [Int'l EM] = 21%

Here you go, I posted YTD (trivial in the long term I know) but more out of interest due to a couple of things: The US market being over heated potentially, and more so, any movement away from the US with the recent political climate.

YTD

Europe via etf IEV +15.96%
Gold via etf IAU +9.92%
Emerging Market via etf EEM +6.51%
Japan via etf EWJ +2.71%
US Aggregate Bonds via etf BND +1.67%
Global aggregate bond index via etf AGGG +0.96%
Canada index via etf EWC +0.94%
US total stock Index via etf VTI –0.66%

And for reference, Canadian Aggregate Bond Index via etf ZAG.TO +1.22%

1 year

Gold via etf IAU +36.93%
US total stock Index via etf VTI +12.84%
Europe via etf IEV +12.04%
Emerging Market via etf EEM +11.12%
Canada index via etf EWC +10.14
US Aggregate Bonds via etf BND +0.83%
Japan via etf EWJ -0.21%
Global aggregate bond index via etf AGGG -0.44%

And for reference, Canadian Aggregate Bond Index via etf ZAG.TO +3.52%

[Stasher]

I am beyond fortunate and have invested wisely over the years, we have such an incredible standard of living when you compare Canada to the rest of the world also. So combining my geographic lottery winning, a government that invests in social programs (health,cpp,oas,dental,pharma) and my good fortune in 10 years of stock market returns I made this choice with confidence.

I don't need to chase the extra 3-7% the US stock market may have done in the past. Like shopping as much as possible to support Canadian companies and paying an extra $5 here and there makes a huge difference right now, so does foregoing that possible extra bit of percent of returns to not support the US right now...especially Musk, Zuck and Bezos in that mix of the top US stocks.

I feel extremely confident with a ZAG, VCN and VIU mix going forward and even better thanks to those numbers you shared Thriftyc

[thriftyc]

I am beyond fortunate and have invested wisely over the years, we have such an incredible standard of living when you compare Canada to the rest of the world also. So combining my geographic lottery winning, a government that invests in social programs (health,cpp,oas,dental,pharma) and my good fortune in 10 years of stock market returns I made this choice with confidence.

I don't need to chase the extra 3-7% the US stock market may have done in the past. Like shopping as much as possible to support Canadian companies and paying an extra $5 here and there makes a huge difference right now, so does foregoing that possible extra bit of percent of returns to not support the US right now...especially Musk, Zuck and Bezos in that mix of the top US stocks.

I feel extremely confident with a ZAG, VCN and VIU mix going forward and even better thanks to those numbers you shared Thriftyc

Thanks for Sharing Stasher, yes, we have a ton to be thankful for.  I'm also now in the mindset of "good enough" with my portfolio. Cheers.

[BrandonP]

People thinking of diversifying away from the US even more now?

[GuitarStv]

People thinking of diversifying away from the US even more now?

Yes.

[Retire-Canada]

People thinking of diversifying away from the US even more now?

No. There is nowhere to hide from the US economy. If it was South Korea starting some crazy trade war you could reasonably avoid/ignore them until they came back to their senses. With the US that's impossible. Every country on the planet will be impacted.

My portfolio was built for the long haul. It was always globally diversified. I'm not changing stuff every time the news gets frothy.

[BrandonP]

People thinking of diversifying away from the US even more now?

No. There is nowhere to hide from the US economy. If it was South Korea starting some crazy trade war you could reasonably avoid/ignore them until they came back to their senses. With the US that's impossible. Every country on the planet will be impacted.

My portfolio was built for the long haul. It was always globally diversified. I'm not changing stuff every time the news gets frothy.

Same. We're in for some very turbulent times imo.

[FrugalToque]

People thinking of diversifying away from the US even more now?

To be fair, I'm in Vanguard Canadian stocks, though I have some RRSP stuff that's "International".  I think I diversified away from the US when they elected Bush the second time.

Sometime, oh, late October/early November, some stuff led me to stock a whole bunch of cash in a GIC the banks in Canada were offering back then.  4% seemed really conservative back then, but it's looking like the front edge of the market at the moment.

I don't pretend to be a market-timing genius, but, I mean, c'mon. We had to know something stupid was going to happen.

[Stasher]

Very happy that I sold all my US stocks last month and moved it all to ZAG to bump up my bond AA and then all of it went into VIU (global equity ex NorthAmerica).

Trump has pushed me to want nothing to do with their economy, plus the bonus was no longer having money in Tesla with Musk.

Nowhere is immune correct, as a global economy DJT is affecting everyone but doesn't mean we need to stick around in the epicentre. Looking forward to a Canadian, EU and SE Asia strengthening economy/alliances/trade.

[aloevera1]

I am sticking to my asset allocation so far. In theory, asset allocation is supposed to protect me from my own emotional reactions...

We'll see how it holds up in practice though. It is always so tempting to say "but this time is REALLY different".

[Retire-Canada]

It is always so tempting to say "but this time is REALLY different".

Every time feels "really different". Dot.com bubble, Global economic crisis, global pandemic, dumb US led global trade war, [fill in the blank], etc...

[techwiz]

People thinking of diversifying away from the US even more now?

Yes.

I too am thinking more about my 50% US allocation, but will stay the course since I can't predict what the stock market of the United States or markets of the rest of the world will be doing in the future. The US market is still the the biggest player in the world market and holds the world trade currency.  I am seeing some new possibilities where those could change if the US continues to weaken world trade and alliances...I don't think that will happen in the short-term, so I will be taking a wait and see approach. 

[GuitarStv]

It is always so tempting to say "but this time is REALLY different".

Every time feels "really different". Dot.com bubble, Global economic crisis, global pandemic, dumb US led global trade war, [fill in the blank], etc...

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

[Retire-Canada]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

It always "feels" different. That's why Buy & Hold is so easy to say and so hard to actually implement.

[aloevera1]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

It always "feels" different. That's why Buy & Hold is so easy to say and so hard to actually implement.

Yea, I am intrigued by the mood on this forum. Aren't we the people who are supposedly able to hold on through the downturns and build their portfolio according to their risk tolerance?

FYI I don't read off topic discussions here, just the investment threads.

[FrugalToque]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

When Bush stole the election from Gore, they told us to stop worrying.
"Hey, does it actually affect YOUR life? No. So just go on living and don't worry."


And then he created Gitmo and tortured detainees and defied the Supreme Court
"Are you being tortured? You read too much news. None of this matters. Who cares about obeying the constitution?"


And they disenfranchised voters, and fed racism and hate, and no one with any power fought back and called them on their lies, or threw in jail any of the people who were defrauding the government


And Trump got elected and they said the same crap.
"Are you affected?"
But he appointed justices and banned abortion and women died and hate spread around the world.


"Are you affected? Just go live you life! This is a minor thing, just like any other. Stop making a big deal."
And he tried to overthrow the government and overturn the election and they didn't throw him in jail.


And women are dying because they can't get medically necessary abortions, and Canadian politicians are emulating Trump's hate and succeeding. A convoy led by racist shitheads showed up on my doorstep, so I know it's perfectly real and something to worry about.


"Are you affected?"
Yes, yes, I am affected.  And we should have done started doing something about this decades ago.
 

[Stasher]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

When Bush stole the election from Gore, they told us to stop worrying.
"Hey, does it actually affect YOUR life? No. So just go on living and don't worry."


And then he created Gitmo and tortured detainees and defied the Supreme Court
"Are you being tortured? You read too much news. None of this matters. Who cares about obeying the constitution?"


And they disenfranchised voters, and fed racism and hate, and no one with any power fought back and called them on their lies, or threw in jail any of the people who were defrauding the government


And Trump got elected and they said the same crap.
"Are you affected?"
But he appointed justices and banned abortion and women died and hate spread around the world.


"Are you affected? Just go live you life! This is a minor thing, just like any other. Stop making a big deal."
And he tried to overthrow the government and overturn the election and they didn't throw him in jail.


And women are dying because they can't get medically necessary abortions, and Canadian politicians are emulating Trump's hate and succeeding. A convoy led by racist shitheads showed up on my doorstep, so I know it's perfectly real and something to worry about.


"Are you affected?"
Yes, yes, I am affected.  And we should have done started doing something about this decades ago.

100% Yes and why I will not have any of my funds in that country, how the F can i sleep knowing I'm in some way supporting oligarchs, DJT and the industrial US Military complex. To the comment on the mood, this isn't a downturn in the markets, no offence but this is the problem with modern capitalism, the detachment of responsibility and accountability to our personal profiting in the system.

VUN is funding so many companies complicit in working to wipe Gaza off the map right now, nevermind what Musk, Zuck and Bezos are doing.

[GuitarStv]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

It always "feels" different. That's why Buy & Hold is so easy to say and so hard to actually implement.

Yea, I am intrigued by the mood on this forum. Aren't we the people who are supposedly able to hold on through the downturns and build their portfolio according to their risk tolerance?

FYI I don't read off topic discussions here, just the investment threads.

I've been investing for retirement since 2006.  I feel like my risk tolerance was tested during the 2008 financial crisis. . . where everything went to shit, markets crashed, and then eventually there was a recovery.  But things went to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering from that period.  Again, during the pandemic I feel like my risk tolerance was tested.  But again, things were going to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering again.  The same cannot be said today - so while I feel that my risk tolerance is about the same it feels to me that actual risk is higher than in those instances.

[Retire-Canada]

There was nothing structurally in place that would prevent the US from recovering again.  The same cannot be said today - so while I feel that my risk tolerance is about the same it feels to me that actual risk is higher than in those instances.

I don't think that ^^ assessment is correct based on today's facts. The Senate just held a bipartisan vote to eliminate the tariffs on Canada. Symbolic at this point, but a demonstration that there is a lot of opposition to Trump's madness. The House and Senate can eliminate Trump's authority to levy tariffs any time they want. The GOP majority is very slim so it doesn't require more than a handful of congress reps to join the Dems turn the tariffs off.

While the US Gov't feels insane at the moment it is still functioning largely as intended and there are checks and balances even if they are not being used as quickly as we'd like. Now if Trump has the military imprison the Senate and shoot a bunch of the Congress then you can say that there are no structures left to stop Trump. So far the US system is still working.

[Kmp2]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

It always "feels" different. That's why Buy & Hold is so easy to say and so hard to actually implement.

Yea, I am intrigued by the mood on this forum. Aren't we the people who are supposedly able to hold on through the downturns and build their portfolio according to their risk tolerance?

FYI I don't read off topic discussions here, just the investment threads.

I've been investing for retirement since 2006.  I feel like my risk tolerance was tested during the 2008 financial crisis. . . where everything went to shit, markets crashed, and then eventually there was a recovery.  But things went to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering from that period.  Again, during the pandemic I feel like my risk tolerance was tested.  But again, things were going to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering again.  The same cannot be said today - so while I feel that my risk tolerance is about the same it feels to me that actual risk is higher than in those instances.

Literally just had the same conversation with DH, I've weathered the dot-com, 2008, pandemic... and this is the first time I've questioned *if* the market would recover.

As @Retire-Canada just stated though, I think currently the US is still functioning and could be seen functional... but I don't think we can say it's a sure thing, there is definitely the possibility now that it might not. There is a possibility that they might cease to function and a full on constitutional crisis is unraveling.

[GuitarStv]

The total breakdown of all levels of government in the US and the likely end of democracy there really does feel different though.

It always "feels" different. That's why Buy & Hold is so easy to say and so hard to actually implement.

Yea, I am intrigued by the mood on this forum. Aren't we the people who are supposedly able to hold on through the downturns and build their portfolio according to their risk tolerance?

FYI I don't read off topic discussions here, just the investment threads.

I've been investing for retirement since 2006.  I feel like my risk tolerance was tested during the 2008 financial crisis. . . where everything went to shit, markets crashed, and then eventually there was a recovery.  But things went to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering from that period.  Again, during the pandemic I feel like my risk tolerance was tested.  But again, things were going to shit for understandable reasons.  There was nothing structurally in place that would prevent the US from recovering again.  The same cannot be said today - so while I feel that my risk tolerance is about the same it feels to me that actual risk is higher than in those instances.

Literally just had the same conversation with DH, I've weathered the dot-com, 2008, pandemic... and this is the first time I've questioned *if* the market would recover.

As @Retire-Canada just stated though, I think currently the US is still functioning and could be seen functional... but I don't think we can say it's a sure thing, there is definitely the possibility now that it might not. There is a possibility that they might cease to function and a full on constitutional crisis is unraveling.

Well . . . I mean, Trump has already directly ignored a court order regarding his illegal deportations without due process.  Trump has also ignored the Supreme Court order that all foreign aid payments be restarted for USAID (since shutting them down was unconstitutional).  So far, there are no repercussions.  I guess the plan going forward is hope that his better nature takes over and he starts behaving?

How the fuck are people saying that the US is still currently functioning?

[Retire-Canada]

Trump has also ignored the Supreme Court order that all foreign aid payments be restarted for USAID (since shutting them down was unconstitutional). 

I'm not interested in doing a point for point rebuttal to every Trump related issue, but I'll tackle this ^^ one as an example. The Supreme Court denied Trump's bid to block the USAID payments, but did not make any decision about when or how the payments would be restarted. Basically they addressed the overall issue and sent the matter back to a lower court to work out the details.

So the Trump gov't has not ignored the Supreme Court. The issue is a mess no doubt and I've got no love from Trump or his administration, but it's not completely off the rails.

[GuitarStv]

Trump has also ignored the Supreme Court order that all foreign aid payments be restarted for USAID (since shutting them down was unconstitutional). 

I'm not interested in doing a point for point rebuttal to every Trump related issue, but I'll tackle this ^^ one as an example. The Supreme Court denied Trump's bid to block the USAID payments, but did not make any decision about when or how the payments would be restarted. Basically they addressed the overall issue and sent the matter back to a lower court to work out the details.

So the Trump gov't has not ignored the Supreme Court. The issue is a mess no doubt and I've got no love from Trump or his administration, but it's not completely off the rails.

Yes, the case was initially before federal judge Amir Ali, who ordered Trump's administration to pay USAIDs debts.  Then Roberts gave Trump's team a break while the SC reviewed the issue.  Then the SC said that indeed, the president is required to follow the constitution and Ali's order to pay USAIDs debt stood.  But it is months later and still the payments are not being made.  Trump's government is arguing that they've fired so many people they can't make payments in a timely manner.

There are no repercussions for ignoring court orders.  Just as there were no repercussions for ignoring the court's order to turn around the planes containing people deported without due process.  This is completely off the rails.

[Freedomin5]

Speaking of diversification in a broader sense, DH and I feel like it is important to also diversify assets away from the stock market in general, so that we don’t have all our eggs in the stock market basket. We have invested in real estate. We invest in ourselves to ensure we are employable. We have focused on our health and have made choices to reduce our dependence on consumer goods, such as living in a walkable/bikeable neighborhood. We want to buy property with a bit of land so we can grow at least some of our own food, maybe raise a few chickens. We want to focus more on skills that allow us to self-sustain. We have friends who are village farmers in rural China, and it’s amazing what a peaceful, healthy life they can live on very little money.

Will we move completely off-grid? Probably no. But at least we can learn some DIY skills that will reduce our need for money and soften the impact of a market crash.

[Retire-Canada]

This is completely off the rails.

What action have you taken or are gong  to take with regards your investments based on this ^^ analysis and conclusion? Sorry if I missed a post. I'm following a few threads on this topic.

[scottish]

We were significantly overweight in the US markets due to years of excellent gains.     We rebalanced away from the US and back to our nominal asset allocation.   Well mostly.   We set a limit on capital gains in the non-registered accounts. 

All the affected US holdings were sold by April 2nd -- it was nice of Trump to tell us when the fuckery was going to get more serious.

[BrandonP]

We were significantly overweight in the US markets due to years of excellent gains.     We rebalanced away from the US and back to our nominal asset allocation.   Well mostly.   We set a limit on capital gains in the non-registered accounts. 

All the affected US holdings were sold by April 2nd -- it was nice of Trump to tell us when the fuckery was going to get more serious.

What is your current allocation?

[scottish]

We were significantly overweight in the US markets due to years of excellent gains.     We rebalanced away from the US and back to our nominal asset allocation.   Well mostly.   We set a limit on capital gains in the non-registered accounts. 

All the affected US holdings were sold by April 2nd -- it was nice of Trump to tell us when the fuckery was going to get more serious.

What is your current allocation?

Equities are 1/3  Canada, 1/3 US and 1/3 international.    The fixed income to equity allocation depends on the type of account.   If the US doesn't sort itself out we'll have to lower the allocation there next year.

[FrugalToque]

We were significantly overweight in the US markets due to years of excellent gains.     We rebalanced away from the US and back to our nominal asset allocation.   Well mostly.   We set a limit on capital gains in the non-registered accounts. 

All the affected US holdings were sold by April 2nd -- it was nice of Trump to tell us when the fuckery was going to get more serious.

What is your current allocation?

Equities are 1/3  Canada, 1/3 US and 1/3 international.    The fixed income to equity allocation depends on the type of account.   If the US doesn't sort itself out we'll have to lower the allocation there next year.

I mean, the US equities are kind of lowering themselves right now.

[GuitarStv]

This is completely off the rails.

What action have you taken or are gong  to take with regards your investments based on this ^^ analysis and conclusion? Sorry if I missed a post. I'm following a few threads on this topic.

I'm slowly reducing my US investments.  Probably won't divest them completely (right up until the last year of the second world war Nazi Germany was making great returns), but I'm reducing their weight.

[PharmaStache]

I'm an old school couch potato investor (VAB/VXC/VCN).  I've always thought my VXC was 50% USA.  Apparently it's not- it's actually 65%.  Has it always been that way, or did I miss something when I started using his 3 fund portfolio?

Anyway, for reasons other than the current events, I want to lessen my US exposure to the amount I thought I had.  Is my best bet buying some VIU to rebalance? 

[Stasher]

Possibly going all in on VGRO will help you @PharmaStache as that drops your total US exposure to 35%.
Or if you want to go radical and also be a bit more risk adverse you can do what I did. Sold all XAW and moved ZAG to 30% with the remaining 70% in VIU and VCN.