Author Topic: Global or US index fund?  (Read 3138 times)

aldrimer

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Global or US index fund?
« on: March 26, 2016, 08:19:24 AM »
Hi!
I'm very new to investing and I have a couple of questions.
Where I live (Scandinavia) there's a limited amount of available index funds. Only one fund exists following a US market index (MSCI USA Index), which has total expenses at 0.4%. The other available funds are Global index funds (MSCI Global Index), which all have expenses at 0.3%.
After reading the MMM post on how to make money on stock investments, my gut reaction is to go with the US fund, even though it's a tad more expensive (I definitely would love the Vanguard fund to be available here in Scandinavia..)
However, I'm really not sure which one to go with.

Could I get some tips and advice on which fund to choose?

Thank you very much!

frugledoc

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Re: Global or US index fund?
« Reply #1 on: March 26, 2016, 08:44:04 AM »
I would go for global index which will have about 50% in us stocks, is more diversified, and surprisingly cheaper. 

Heckler

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Re: Global or US index fund?
« Reply #2 on: March 26, 2016, 09:13:35 AM »
+1 for world.  Cheaper and more diverse.  Dont get caught up solely in the US bull run.

seattlecyclone

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Re: Global or US index fund?
« Reply #3 on: March 26, 2016, 09:51:30 AM »
I'd go mostly with the worldwide fund. If you can supplement with a fund that invests only in Scandinavia, or Europe at least, that would be good. A little bit of a bias toward local stocks helps with currency risks. Otherwise I think worldwide investing is the way to go.

aldrimer

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Re: Global or US index fund?
« Reply #4 on: March 26, 2016, 01:51:42 PM »
Thank you guys very much for your answers!
I'll consider the global index more. I do like the idea of a more diversified portfolio, but I just have this gut feeling that if the US goes down, all other economies are going down with it, so that's the reason why I wanted to go with the MSCI USA Index. But I might just reconsider and go for the global one...

frugledoc

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Re: Global or US index fund?
« Reply #5 on: March 26, 2016, 02:25:49 PM »
Whatever you choose, it will probably not make a big difference.  Just make a plan, and stick to it.

Radagast

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Re: Global or US index fund?
« Reply #6 on: March 26, 2016, 08:18:39 PM »
Thank you guys very much for your answers!
I'll consider the global index more. I do like the idea of a more diversified portfolio, but I just have this gut feeling that if the US goes down, all other economies are going down with it, so that's the reason why I wanted to go with the MSCI USA Index. But I might just reconsider and go for the global one...
In my view it isn't protection against a massive crash, so much as an unexpected decades-long period of US stagnation or relative underperformance.

MustacheAndaHalf

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Re: Global or US index fund?
« Reply #7 on: March 27, 2016, 04:22:06 AM »
US stocks could have a great year, but while the dollar grows weaker - instead of gains, you break even.  So I'd say go with the mix of global stocks, to at least have exposure to more currencies - their fluctuations are more likely to average out.

ransom132

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Re: Global or US index fund?
« Reply #8 on: March 27, 2016, 07:14:29 AM »
Thank you guys very much for your answers!
I'll consider the global index more. I do like the idea of a more diversified portfolio, but I just have this gut feeling that if the US goes down, all other economies are going down with it, so that's the reason why I wanted to go with the MSCI USA Index. But I might just reconsider and go for the global one...
Not necessarily, I live in Canada, so I also have Canadian index fund along with the global (which includes the US) and around 4 years ago while the US economy was struggling, the Canadian index was performing better than the US one. So it does happen, that it why it always important to be diversified.