Hmm in my other thread no one mentioned international stocks and bonds..
Could be because you didn't ask specifically about asset allocation.
Anyway, the total world market capitalization is something like 40% US, 60% everybody else, so if all your stocks are US stocks you're not very diversified. Most US-based investors are "tilted" towards US, which is fine for reasons such as reduction of currency risk and correlation between home-market investment performance and cost of living (or whatever -- that's kind of beyond the scope of this comment).
For your situation (being from the Philippines), I'd say that maybe you want to invest a little bit more in Asia than usual -- maybe an extra 5% or so -- especially if you think it's likely that you'll move back eventually. You could consider tilting specifically towards the Philippines, as opposed to Asia in general, but I don't know enough about that to say whether it would be a good idea or not. Of course, if you are 100% certain to stay in the US then it's irrelevant and you should go with the same kind of portfolio any other normal American would use.
Read this.I never really thought about bonds. Sorry, im pretty new. Here was my thread to explain things:
http://forum.mrmoneymustache.com/ask-a-mustachian/1st-post-new-to-mmm-started-with-0-feels-like-i'm-saving-too-slow-need-help/
Thought all i needed to do was invest in mutual funds. I guess its way more than that. *brain explosion*
Bonds are just another asset class and can be packaged into mutual funds too. For example, Vanguard's total bond market index fund is VBTLX.
I personally own zero bonds [or bond funds] and argue that, for mustachians, the portfolio's percentage of bonds should be smaller than commonly recommended (e.g. 0-20%) because a very-early retiree's time horizon is so long.
Other people argue that holding bonds is important for rebalancing purposes. For example, when the stock market goes down and you want to buy stocks "on sale," you need money to do so -- money you get by selling some of your bond allocation (which has necessarily grown as a percentage of your portfolio if stocks are relatively down).
I would argue that an 80/20 stock/bond portfolio would tend to have a slightly lower
very-long-term return than a 100% stock portfolio even with rebalancing, but is very likely to be closer to the
efficient frontier.
Also read this.It seems like my 401k dropped by a $1000. Help i dont know what happened.
The market went down. It happens; don't worry about it.
You still own the same number of shares you did before; they just cost less at the moment. So buy more!
(Either that or somebody withdrew (i.e., you) money from the account. But if that happened, I assume you'd know about it.)
Should i do automatic rebalance? My 401k offers that.
IMO, it just depends on what's the most convenient thing for you. If your 401k's asset allocation is the same as your
overall asset allocation, then it's probably a good idea. If you have assets in other assorted accounts such that you'd have to rebalance manually anyway, maybe not.
I was going to write an example about how that would work, but it seemed like too much effort so I didn't bother. Let me know if you need it.
