Since 1990 US has outperformed most of the time. From 1972-1990 international outperformed most of the time. What will happen in the future? Who knows, hedge your bets, own both.
Don't disagree with your chart, but as I basically already said... going by
all of that timeframe, the US did better, going by
most of that timeframe, the US did better, going by
longer than that timeframe, the US did better, and going by the
latest timeframe (of decades), the US did better. That's at least a
slightly better reading of that chart than your version, IMO.
I don't find the volatility/efficiency argument very convincing. I don't consider volatility to be 'risk' like a lot of financial people use it, and so it doesn't end up with a logical version of efficiency, either.
I consider having made more/faster by not being in Int. to be more efficient in real world terms. And never cared about volatility being a little higher. Doesn't hurt anything if I ignore it, and gives me better buy-in chances during crashes -like in Feb. last year, I made ~35% on some extra cash I put in the MidCap Index at that time. That's significantly more than if I put it in the less volatile Total Market that crashed/rebounded at the exact same time.
Then you asked 'what will happen in the future?' like it's just rhetorical and a complete unknown. But I listed a bunch of stuff that shines a light on what
is known, and more likely than not in Europe/Japan/US's future. I could be wrong, but it's more in-depth than "Who knows, so might as well have
far more in Int. than most investment managers or major companies like Vanguard, Fidelity, T Rowe Price, etc. recommend."
That just seems like a weaker argument than what I presented before you.
I'd be curious if you'd argue against my suggestion of having a heavy dose of MidCaps
instead of Int. mixed in someone's Stock allocation? That chart would show it kicking the ass of both US Total
and US/Int. blend.
It's a bit more volatile, but historically made far more, so I never cared. I was so ahead that the biggest drops only put me in the same place I would've been in those less volatile Indexes. It rebounded just as fast as the 500 Index in the 2008 crash, and didn't have nearly the awful problem during the dotcom bubble.
That's kind of my same argument for all-stocks vs. stock/bond blend, too. More volatile, but you're
probably more ahead when you get hit with a bigger crash, and then pull back ahead after that, and will
probably pull ahead 99% of the rest of the time.
Oh... and I don't get how you're saying less than 40% Int. is not diversified enough? Statistically, it only takes like ~30 random stocks to be pretty well diversified in the US stock market, so I don't get how being in thousands in the total US market, or with 39% or less in the whole world, isn't diversified enough for you?