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Learning, Sharing, and Teaching => Investor Alley => Topic started by: RangerOne on January 27, 2017, 04:42:12 PM

Title: Rebalancing 401k, Picking an International Percent Allocation
Post by: RangerOne on January 27, 2017, 04:42:12 PM
I generally adjust my work 401k to mirror the allocation percentages found in Vanguards Targeted Retirement accounts. I trust their yearly allocations a bit more than the ones fidelity offers as options for us at work.

Right Now I am looking at this fund:
https://personal.vanguard.com/us/funds/snapshot?FundId=0306&FundIntExt=INT#tab=2 (https://personal.vanguard.com/us/funds/snapshot?FundId=0306&FundIntExt=INT#tab=2)

This allocation seems sensible, assuming a semi traditional retirement age of 60.

It looks like their international stock allocation is a bit higher than the past few years. I think last year it was around 30%. I have always kept it around 25%.

I am curious what percentage others are aiming with regard to US versus International stocks for assuming a standard early split of 90/10.

Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: VoteCthulu on January 27, 2017, 05:09:34 PM
I have 20% right now, but I see a lot of suggestions of 40-50%. I'm not ready for that much yet, though.
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: AdrianC on January 27, 2017, 06:31:12 PM
I have 20% also, in a 90/10 stock/bonds & cash allocation.

I intend to increase international with more VXUS. It makes sense to me to have more. Haven't forced myself to do it yet...and...horror of horrors...I've been studying the GEM (Global Equities Momentum) strategy, which currently has its adherents in US stocks (VTI).
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: Radagast on January 27, 2017, 09:39:16 PM
I think Vanguard's 60% US / 40% international is probably close to best. I considered 50% for a long time, but in the end there are some good reasons for US residents to favor the US:
-Fractionally lower expenses
-Avoid higher taxes by foreign governments
-Optimize expected currency volatility
-Geopolitical risk in international investing (if the US gets in a trade or real war with another capitalist country your assets in that country may be forfeit)

On the flip side there are some concentrated risks in the US. If the US stalls for a decade or two you may be happy to have large international investments, especially if you need the money to live on.
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: tarheeldan on January 27, 2017, 09:48:54 PM
I was at 20% but am now at 25% and moving towards 40% with future buys. Someone in the Facebook group shared an article about the efficient frontier. Just saw this too:

https://www.bogleheads.org/wiki/Domestic/International
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: JAYSLOL on January 27, 2017, 10:33:36 PM
(In Canada) I've got mine in 1/3 Canadian, 1/3 US and 1/3 other international stocks
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: LAGuy on January 27, 2017, 11:18:57 PM
I'm at 60/40 right now as well. I think the strong dollar and the attractive valuations of international stocks right now means it makes sense to keep a healthy amount of them. If the dollar was weaker, I'd probably dial that back to 70/30.
Title: Re: Rebalancing 401k, Picking an International Percent Allocation
Post by: WallStreetPhysician on January 28, 2017, 03:51:03 AM
I wouldn't stress too much about this - 25% vs. 30% vs 40% is perfectly acceptable.  Just stick to an allocation and don't change it based on the relative performance of U.S. vs. international.