Put it all in VTSAX?

[El_Viajero]

My invested assets are currently split roughly 70/30 between VTSAX and VTIAX. An advisor convinced me many years ago that this was a smarter way to be an index fund investor because it gave me some international exposure. I've seen a lot of people on here and elswhere who just put everything in VTSAX or VTI. Is there any advantage to be gained by maintaining my status quo?

[FLBiker]

VTSAX is only invested in the US stock market.  VTIAX is invested in the rest of the world.  If you want to put all your eggs in the US basket, you can invest it all in VTSAX.  Personally, I balance my equity allocation to basically mirror the world markets.  I'm currently at 55% US and 45% rest of world.  That way, if one out performs the other, I can rebalance accordingly.

Historically, I think it's true that the US has out performed the rest of world, but that isn't guaranteed to hold true in the future.

[El_Viajero]

VTSAX is only invested in the US stock market.  VTIAX is invested in the rest of the world.  If you want to put all your eggs in the US basket, you can invest it all in VTSAX.  Personally, I balance my equity allocation to basically mirror the world markets.  I'm currently at 55% US and 45% rest of world.  That way, if one out performs the other, I can rebalance accordingly.

Historically, I think it's true that the US has out performed the rest of world, but that isn't guaranteed to hold true in the future.

Thanks. Yeah, I think the idea behind putting everything into VTSAX or VTI (aside from simplicity) is the notion that you gain sufficient international exposure via either since US corporations in that index have a built-in international footprint. I'm not sure whether I agree with this or not.

[JoePublic3.14]

VTSAX is only invested in the US stock market.  VTIAX is invested in the rest of the world.  If you want to put all your eggs in the US basket, you can invest it all in VTSAX.  Personally, I balance my equity allocation to basically mirror the world markets.  I'm currently at 55% US and 45% rest of world.  That way, if one out performs the other, I can rebalance accordingly.

Historically, I think it's true that the US has out performed the rest of world, but that isn't guaranteed to hold true in the future.

Thanks. Yeah, I think the idea behind putting everything into VTSAX or VTI (aside from simplicity) is the notion that you gain sufficient international exposure via either since US corporations in that index have a built-in international footprint. I'm not sure whether I agree with this or not.

You can find endless arguments for both sides. We will only know who guessed correctly with hindsight.

Our taxable is all VTSAX all the time. We get international exposure via 401k account vet low cost target date 'funds' (collective investment trusts).

Our overall AA is around 14% of equities in international right now. We basically just let it float.

[davisgang90]

In A Simple Path to Wealth, Collins makes the case that given the number of companies in VTSAX and VTI that are multinational corporations, you've got a lot of international skin in the game without seeking a separate international fund.  I'm happy with VTSAX and VTI personally.

[The 585]

I'd be tempted to stick to your plan and not chase past gains from US-based stocks. Your amount of international exposure is actually ideal IMO, and Vanguards target retirement funds and lifestrategy funds have a similar amount of international exposure. I myself took my international exposure simplification a step further, and moved everything into VTWAX (Vanguard Total World Fund).

Personally I find putting all my investments in US-based funds to be a bit risky. A lot of people will mention what happened to Japan as an example.

[PDXTabs]

VTSAX is only invested in the US stock market.  VTIAX is invested in the rest of the world.  If you want to put all your eggs in the US basket, you can invest it all in VTSAX.  Personally, I balance my equity allocation to basically mirror the world markets.  I'm currently at 55% US and 45% rest of world.  That way, if one out performs the other, I can rebalance accordingly.

Historically, I think it's true that the US has out performed the rest of world, but that isn't guaranteed to hold true in the future.

Me too (global market-cap weighted), but I know it is a slightly contrarian take.

I really like JL Collins, but I disagree with him in this one area.

Vanguard: Global equity investing: The benefits of diversification and sizing your allocation

[Watchmaker]

I think all VTSAX, global marketed weighted, or anywhere in between are all reasonable positions.

Taylor Larimore over on Bogleheads is known to say: "When experts disagree, it is often because it does not make a foreseeable difference". The key word there being foreseeable. It might very well make a difference, but you won't know that until after it's happened. For this reason, I prefer to have at least some international exposure, though I am not up to global market weighting.

There's also an advantage to sticking with a plan. You've got 30% international now, and there's nothing wrong with that, so I'd stick with it.

[beee]

Would you think differently if the US has not outperformed the world lately?
Past performance doesn't guarantee the future.

[MustacheAndaHalf]

VTSAX is only invested in the US stock market.  VTIAX is invested in the rest of the world.  If you want to put all your eggs in the US basket, you can invest it all in VTSAX.  Personally, I balance my equity allocation to basically mirror the world markets.  I'm currently at 55% US and 45% rest of world.  That way, if one out performs the other, I can rebalance accordingly.

Historically, I think it's true that the US has out performed the rest of world, but that isn't guaranteed to hold true in the future.

Thanks. Yeah, I think the idea behind putting everything into VTSAX or VTI (aside from simplicity) is the notion that you gain sufficient international exposure via either since US corporations in that index have a built-in international footprint. I'm not sure whether I agree with this or not.

Look at the data for yourself on Portfolio Visualizer.  I like to go a decade at a time, like 1980-1989 then 1990-1999.  You'll see some decades US beats international but other decades it's the reverse.  Seeing the data for yourself has an added advantage - when you're not sure if you should stick with it, you've seen data that backs up your choice.

[Telecaster]

I think all VTSAX, global marketed weighted, or anywhere in between are all reasonable positions.

Taylor Larimore over on Bogleheads is known to say: "When experts disagree, it is often because it does not make a foreseeable difference". The key word there being foreseeable. It might very well make a difference, but you won't know that until after it's happened. For this reason, I prefer to have at least some international exposure, though I am not up to global market weighting.

There's also an advantage to sticking with a plan. You've got 30% international now, and there's nothing wrong with that, so I'd stick with it.

^ Love this.  Portfolio construction is a true rabbit hole.   And no one really knows for sure which the best portfolio will be in the future.   I think the OP's plan looks just fine. 

[thesis]

"Put it all in dog money!"

I have about half of my HSA in bonds, and a decent chunk of that is international bonds. They've done surprisingly well. For my retirement accounts, I've wondered about diversifying some of my VTSAX across a broader range, but, as mentioned above, there is an old cliche in the FIRE community that many of the companies inside of it are already international companies. Some day I would, as others have mentioned, put some allocation into an international fund, but in general, I have more faith in the US economy than most. The problem of investing in, say, some sort of worldwide index is that so many countries are relatively unstable, which makes for a good reminder that stock markets only "work" under specific conditions, so I try to make sure my life is designed to be a little more resilient, market gains or not. The other problem is that countries are so interconnected - the Great Recession in the US echoed across the world. But I still plan to diversify more some day.

[KarefulKactus15]

I literally lose money every time I chase past gains. ..

If I just follow my asset allocation and re balance yearly I've had more dumb luck than anything else.

I swear any time I try to do something reactionary it bites me in the ass.  It's comical at this point.

[svosavvy]

I literally lose money every time I chase past gains. ..

If I just follow my asset allocation and re balance yearly I've had more dumb luck than anything else.

I swear any time I try to do something reactionary it bites me in the ass.  It's comical at this point.

This is me as well.  Never underestimate the power of dumb luck.  That said, I love making wild market moves with a small percentage of our stache.  It's brain exercise and a lesson in humility all wrapped up into one. 

[KarefulKactus15]

I should ad that right before the 2020 crash, my statement says I should rebalance mid year if the allocation is off by more than x amount.   

In February 2020 it was off by x amount triggering a mid year rebalance so I sold stock and moved into bonds.   During the crash deep cycle or whatever it became severely "off" again, so regardless of all the panic I moved the bonds back into stock.      Then again the ratio was way off by August 2020 so one more fix.       Beyond that I rebalance in 3rd qtr every year. 

Lotta really dumb luck there.  If I woulda went with what everyone else did and not followed my asset allocation I wouldn't have been so lucky.

[joe189man]

I know the FIRE world loves VTSAX but there may be better AA options out there

https://forum.mrmoneymustache.com/investor-alley/psa-read-tyler-of-portfolio-charts'-recent-blog-post-on-portfolio-construction/

[Telecaster]

I know the FIRE world loves VTSAX but there may be better AA options out there

https://forum.mrmoneymustache.com/investor-alley/psa-read-tyler-of-portfolio-charts'-recent-blog-post-on-portfolio-construction/

There almost certainly are, and I don't do 100% VTSAX myself.  BUT I am still a fan of the strategy.  It is simple, easy to understand, and it works. 

[talltexan]

Thanks for posting the Tyler piece, i found it very persuasive and bought myself some $AVUV and $TLT.