Author Topic: Anyone else getting tired of their International allocation?  (Read 23777 times)

FIRE47

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Anyone else getting tired of their International allocation?
« on: April 29, 2016, 05:00:02 AM »
I've followed general consensus on this and had about 20% allocated to international developed through my young 5-6 year investment horizon.

not only does it seem much more volatile than anything else but the performance has been miserable.

At least my Canadian stuff has a commodities linked upside that seems to be turning around.

Is Japan doomed at this point or what's going on?

matchewed

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Re: Anyone else getting tired of their International allocation?
« Reply #1 on: April 29, 2016, 05:15:58 AM »
This seems less of a problem with an international section of allocation and more of a problem of your expectations of the performance of the international allocation.

Seppia

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Anyone else getting tired of their International allocation?
« Reply #2 on: April 29, 2016, 05:41:48 AM »
I mean really? 5 years?
You will need to wait at least another 15 to draw any conclusion.
Usually the USA / international performances vary a bit. There are cycles when one does better and vice versa.
The point as usual is not to try pick the winners, but get the average market returns.

Btw:
I'm willing to bet $10 that in the next 15 years $100 put today into international will outperform $100 put today in USA equities.

nereo

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Re: Anyone else getting tired of their International allocation?
« Reply #3 on: April 29, 2016, 06:11:43 AM »
Agree with Seppia - 5 years is not long enough time period.  Domestic/international markets tend to be cyclical, and each cycle can last 5-10 years.

stay the course.

wienerdog

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Re: Anyone else getting tired of their International allocation?
« Reply #4 on: April 29, 2016, 06:17:21 AM »
What you only have 20%?

Seppia

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Anyone else getting tired of their International allocation?
« Reply #5 on: April 29, 2016, 07:10:50 AM »
If it gets too popular, shouldnt it have created a bubble instead of lagging behind?
The 21st century (if I'm not mistaken) has seen international underperform the USA.
Plus all you say here:

expanding entrepreneurial and innovative workforce, high liquidity, good policy, stable currency, earnings generated over a diversity of sectors, lender of last resort, and favorable incentives in rewarding shareholders.

Also applies to Europe for example, and many Asian countries.

Lastly:

James
 Director, Quantitative research
 stockmarketmap.wordpress.com
 Boulder, CO

I always meant to ask you, there seems to be some disconnect between your job title and the fact that the company you work for has a .wordpress.com address 

What does Director, Quantitative research exactly mean?
How many people are employed by stockmarketmap.wordpress.com ?

Retire-Canada

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Re: Anyone else getting tired of their International allocation?
« Reply #6 on: April 29, 2016, 07:44:48 AM »
I've followed general consensus on this and had about 20% allocated to international developed through my young 5-6 year investment horizon.

not only does it seem much more volatile than anything else but the performance has been miserable.

At least my Canadian stuff has a commodities linked upside that seems to be turning around.

Is Japan doomed at this point or what's going on?



I'm not getting rid of my international stocks and they make up 70% of my portfolio [50% USA and 20% Non-US Int'l]. I can't predict the future so I'm diversified.

Heckler

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Re: Anyone else getting tired of their International allocation?
« Reply #7 on: April 29, 2016, 07:49:01 AM »
Dammit, you beat me to it. 


Follow the EAFE bouncing ball...  Just make sure you're still holding it when it goes up.


Friar

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Re: Anyone else getting tired of their International allocation?
« Reply #8 on: April 29, 2016, 07:54:26 AM »
I'm not getting rid of my international stocks and they make up 70% of my portfolio [50% USA and 20% Non-US Int'l]. I can't predict the future so I'm diversified.

I appreciate how, like anyone outside of the USofA, US stocks count as international :P

meghan88

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Re: Anyone else getting tired of their International allocation?
« Reply #9 on: April 29, 2016, 08:37:02 AM »
sunk 43K into VXC during January and March of this year, and down it goes.  Thinking I might as well put in another 20K.

Eric

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Re: Anyone else getting tired of their International allocation?
« Reply #10 on: April 29, 2016, 11:03:35 AM »
I always meant to ask you, there seems to be some disconnect between your job title and the fact that the company you work for has a .wordpress.com address 

What does Director, Quantitative research exactly mean?
How many people are employed by stockmarketmap.wordpress.com ?

It means he pops into threads, contributes a bunch of investing jargon with no meaning and usually no relation to the topic at hand, and then hope some noob is impressed by his big words enough to click on his website.  Check out his post history.  It'd be funny if it wasn't so spammy.

Eric

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Re: Anyone else getting tired of their International allocation?
« Reply #11 on: April 29, 2016, 11:09:37 AM »
This is the "buy low" part.  Stay the course. 

nereo

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Re: Anyone else getting tired of their International allocation?
« Reply #12 on: April 29, 2016, 11:24:34 AM »
I always meant to ask you, there seems to be some disconnect between your job title and the fact that the company you work for has a .wordpress.com address 

What does Director, Quantitative research exactly mean?
How many people are employed by stockmarketmap.wordpress.com ?

It means he pops into threads, contributes a bunch of investing jargon with no meaning and usually no relation to the topic at hand, and then hope some noob is impressed by his big words enough to click on his website.  Check out his post history.  It'd be funny if it wasn't so spammy.
D'oh!  I was wondering what the H he was talking abotu, so I clicked on his website. 
Didn't learn much, other than not to click on it again.

ZiziPB

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Re: Anyone else getting tired of their International allocation?
« Reply #13 on: April 29, 2016, 11:36:17 AM »
This is the "buy low" part.  Stay the course. 

This ^.  And the international funds have been good for tax loss harvesting in the last couple of years :-)

FIRE47

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Re: Anyone else getting tired of their International allocation?
« Reply #14 on: April 29, 2016, 12:03:20 PM »
Stick with the U.S. as the U.S. markets and economy represent expanding entrepreneurial and innovative workforce, high liquidity, good policy, stable currency, earnings generated over a diversity of sectors, lender of last resort, and favorable incentives in rewarding shareholders.
Corruption also holds back economic growth as in the case of Brazil - a large component of Latin American ETFs.
"Consensus" is the operative word. The promotion of international / emerging diversification  is relatively new in the literature ( 21st century ) and the underperformance may illustrate an example of when a premise ( have some "international" exposure ) gets too popular.

James
 Director, Quantitative research
 stockmarketmap.wordpress.com
 Boulder, CO

Interesting, this is what I was beginning to think

Checked out the website seems like you know your stuff

JZinCO

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Re: Anyone else getting tired of their International allocation?
« Reply #15 on: April 29, 2016, 12:31:09 PM »
I always meant to ask you, there seems to be some disconnect between your job title and the fact that the company you work for has a .wordpress.com address 

What does Director, Quantitative research exactly mean?
How many people are employed by stockmarketmap.wordpress.com ?

It means he pops into threads, contributes a bunch of investing jargon with no meaning and usually no relation to the topic at hand, and then hope some noob is impressed by his big words enough to click on his website.  Check out his post history.  It'd be funny if it wasn't so spammy.
D'oh!  I was wondering what the H he was talking abotu, so I clicked on his website. 
Didn't learn much, other than not to click on it again.
I've had the same thoughts. Like Director of the Quantitative Research of a company called Stock Market Map? Since I live <1 hr from Boulder I decided to google ["Stock Market Map"]. No company website but a cool chart of companies scaled by market cap (https://finviz.com/map.ashx?t=sec_all). The I google ["Stock Market Map" Google] and the first hit is a restaurant called Japango.
I'm assuming Stock Market Map is a shell name for a blog that is really "dba" (not really doing business though) James. But if "James" was doing business, why would he prefer anonymity by hiding the surname?

Off topic but I've always wondered about "James" as well.

Regards*,
J
CEO, CFO, Owner
Best freakin financial advise you can get it, LLC
somebarelycoherentandpooraestheticsblog.freewebhostservice.domainextension
Anytownyouthinkisimpressive,ST
*I know I am harsh but I think forum rules say you can only pimp your product/blog/etc in your sig or one time in a forum message
« Last Edit: April 29, 2016, 12:35:25 PM by JZinCO »

steveo

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Re: Anyone else getting tired of their International allocation?
« Reply #16 on: April 29, 2016, 02:46:27 PM »
I've followed general consensus on this and had about 20% allocated to international developed through my young 5-6 year investment horizon.

not only does it seem much more volatile than anything else but the performance has been miserable.

At least my Canadian stuff has a commodities linked upside that seems to be turning around.

Is Japan doomed at this point or what's going on?

20% and you are worried about this. Are you Canadian ?

If you are from the US I don't think you need international stock exposure but it's probably still a good idea and 20% is a really small allocation. If you are Canadian then I think 20% is probably too low an allocation.

Anyway I would stick with it without a doubt.

I also think James has absolutely no idea and is inherently untrustworthy.

Cycling Stache

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Re: Anyone else getting tired of their International allocation?
« Reply #17 on: April 29, 2016, 03:11:18 PM »
I have to admit that I'm 100% VTSAX.  It seems good enough to me.  Some international exposure through top US companies, no currency exchange issues (I'm in US), and I can buy one thing, which makes more likely to buy that one thing.

I continue to have on my task list to research asset allocation, but I haven't seen enough to make me motivated to switch.  For me, there's a bigger risk of inaction through paralysis versus benefits of further diversification.

Of course, I'm not really in a position where I need to draw down on my stocks anytime soon, so maybe that's part of it.

In any event, carry on.  I'm a big believer in behavioral errors, so I wonder how much cost there is resulting from people not taking action due to confusion over asset allocation, versus just telling them to buy one thing and there's a better chance that they'll do that.

FIRE47

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Re: Anyone else getting tired of their International allocation?
« Reply #18 on: April 29, 2016, 03:23:59 PM »
I've followed general consensus on this and had about 20% allocated to international developed through my young 5-6 year investment horizon.

not only does it seem much more volatile than anything else but the performance has been miserable.

At least my Canadian stuff has a commodities linked upside that seems to be turning around.

Is Japan doomed at this point or what's going on?

20% and you are worried about this. Are you Canadian ?

If you are from the US I don't think you need international stock exposure but it's probably still a good idea and 20% is a really small allocation. If you are Canadian then I think 20% is probably too low an allocation.

Anyway I would stick with it without a doubt.

I also think James has absolutely no idea and is inherently untrustworthy.

Well I count US separately just for simplicity in discussing, when I say international I mean EAFE. I try to have 30% us on top of that

steveo

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Re: Anyone else getting tired of their International allocation?
« Reply #19 on: April 29, 2016, 09:33:27 PM »
I have to admit that I'm 100% VTSAX.  It seems good enough to me.  Some international exposure through top US companies, no currency exchange issues (I'm in US), and I can buy one thing, which makes more likely to buy that one thing.

I continue to have on my task list to research asset allocation, but I haven't seen enough to make me motivated to switch.  For me, there's a bigger risk of inaction through paralysis versus benefits of further diversification.

Of course, I'm not really in a position where I need to draw down on my stocks anytime soon, so maybe that's part of it.

In any event, carry on.  I'm a big believer in behavioral errors, so I wonder how much cost there is resulting from people not taking action due to confusion over asset allocation, versus just telling them to buy one thing and there's a better chance that they'll do that.

I'm Australian and so I don't believe that I can be 100% invested in Australian stocks as it's too small a market to get a lot of diversification. If I was American I think I would just choose an all bond fund and the rest in US stocks. I think 100% VTSAX would work fine.

nobodyspecial

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Re: Anyone else getting tired of their International allocation?
« Reply #20 on: May 01, 2016, 08:23:14 AM »
sunk 43K into VXC during January and March of this year, and down it goes.  Thinking I might as well put in another 20K.
By the same percentage that the $CDN has gone up by any chance?

ps. feeling you pain, I put my full TFSA limit for the year into VXC on 1st Jan

EarlyStart

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Re: Anyone else getting tired of their International allocation?
« Reply #21 on: May 02, 2016, 02:48:16 PM »
I mean really? 5 years?
You will need to wait at least another 15 to draw any conclusion.
Usually the USA / international performances vary a bit. There are cycles when one does better and vice versa.
The point as usual is not to try pick the winners, but get the average market returns.

Btw:
I'm willing to bet $10 that in the next 15 years $100 put today into international will outperform $100 put today in USA equities.



I agree with the sentiment in bold print. Regardless, don't succumb to recency bias.


JZinCO

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Re: Anyone else getting tired of their International allocation?
« Reply #22 on: May 02, 2016, 05:01:23 PM »
Or gambler's fallacy.
The reason P/E of intl is lower is because the market has priced in lower growth expectations.

Livewell

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Re: Anyone else getting tired of their International allocation?
« Reply #23 on: May 02, 2016, 05:03:41 PM »
Disclaimer: I'm not expert, just a reader of economics and investing...

I'm no fan of intl stocks based on two things - long term demographics in Japan and EU not great versus US (check your fund to see how high of a percentage they have in these two economies), and feedback from Jack Bogle and JLColins on if you buy US multinationals you are in effect buying intl already.

I do think there is some intermediate term upside to intl stocks due to currency as we are likely to see the dollar moderate over 12-18 months.  However there is upside to S&P due to the same factor.

« Last Edit: May 02, 2016, 05:34:19 PM by Livewell »

Indexer

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Re: Anyone else getting tired of their International allocation?
« Reply #24 on: May 02, 2016, 08:59:44 PM »
I'm no fan of intl stocks based on two things - long term demographics in Japan and EU not great versus US (check your fund to see how high of a percentage they have in these two economies), and feedback from Jack Bogle and JLColins on if you buy US multinationals you are in effect buying intl already.

I love Bogle, but that sword cuts both ways. Sure Apple is a multinational and so is GM, but so are Samsung and Toyota. I don't know how you can use multinationals as an excuse to buy domestic and then ignore all the other multinationals in the world.

Studies have shown adding some international to a pure domestic portfolio actually lowers risk. When GM is having a bad year Toyota could be stealing their customers. Now apply this same thought process to thousands of companies worldwide. More diversification is normally a very good thing. The perfect range to be in is normally 30-40% international stock 60-70% domestic stock.

The domestic/international performance charts also tend to run in trends. One outperforms the other for awhile, and then it switches. For this reason the more people who tell me they want out of international... the more international I want to buy. ;)

Buy when others are fearful and sell when others are greedy.
« Last Edit: May 02, 2016, 09:01:24 PM by Indexer »

Gonzo

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Re: Anyone else getting tired of their International allocation?
« Reply #25 on: May 02, 2016, 10:12:12 PM »
The best time to buy is when it feels awful. 

Seppia

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Anyone else getting tired of their International allocation?
« Reply #26 on: May 02, 2016, 11:42:22 PM »
I'm no fan of intl stocks based on two things - long term demographics in Japan and EU not great versus US (check your fund to see how high of a percentage they have in these two economies), and feedback from Jack Bogle and JLColins on if you buy US multinationals you are in effect buying intl already.

I love Bogle, but that sword cuts both ways. Sure Apple is a multinational and so is GM, but so are Samsung and Toyota. I don't know how you can use multinationals as an excuse to buy domestic and then ignore all the other multinationals in the world.

Studies have shown adding some international to a pure domestic portfolio actually lowers risk. When GM is having a bad year Toyota could be stealing their customers. Now apply this same thought process to thousands of companies worldwide. More diversification is normally a very good thing. The perfect range to be in is normally 30-40% international stock 60-70% domestic stock.

The domestic/international performance charts also tend to run in trends. One outperforms the other for awhile, and then it switches. For this reason the more people who tell me they want out of international... the more international I want to buy. ;)

Buy when others are fearful and sell when others are greedy.

100% agree.
I love bogle, but it's one of the stupidest arguments ever
"Why bother buying all energy companies, Exxon already sells everywhere"
Sure Apple sells in Europe and China, but Samsung doesn't exactly sell their phones in Asia only.
What tells bogle and other anti-international that Samsung is not going to replace Apple?
Or that the next Google will not come from China?

Kaspian

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Re: Anyone else getting tired of their International allocation?
« Reply #27 on: May 04, 2016, 09:01:04 AM »
OP, I can trust you're a Canadian investor due to your mention of our commodities market?

I'm not sure why you'd drop an asset class which returned ~19% last year and ~8% over 5 years?  At least in my Canadian portfolio that's what happened.  Are you sure you're not looking too short term (e.g., this year) and letting recency bias in? 

So, to answer your question:  No, I'm not "getting tired" of that.  :)   I love diversification.

dougules

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Re: Anyone else getting tired of their International allocation?
« Reply #28 on: May 04, 2016, 03:55:56 PM »
This was already discussed a bit on "Topic: International Index Funds - get rid of them entirely?"  I'll summarize my thoughts from there.

Most MMM followers believe in the idea behind market cap weighted index funds, that research has shown the market to be more efficient than you if you're not doing the ridiculous amount of homework that Warren Buffett and his team of experts does.  If you agree with that philosophy,  then why not expand it out to the world as a whole?

The market has still weighted companies listed in the US as %53 of the market share, so you'll still be half in US stocks.  If a country isn't trustworthy, then the market has probably already factored that into prices better than you can (eg China is only 2%).  If a country looks like it has a lackluster future (eg Japan), that's going to be factored in.  The same market efficiency arguments apply to countries as they do to companies.

The other reasoning is that more diversification is LESS risk.  You don't know what US markets will look like in a decade or two, so why not have a few assets everywhere with the market doing the work to balance the risk for you?

And if the international markets have been unimpressive as of late in comparison to the US, that might be the best time to keep them or add more.  Buy low (international), sell high (US), right?
« Last Edit: May 04, 2016, 03:57:44 PM by dougules »