Showerthought: Bogleheads are wrong about international stock allocation

I ran the numbers on 20 years of returns for a Vanguard total international fund vs the S&P 500 last weekend and found the international fund underperformed by over 2% annually, so why do people still think you need 30% or more in ex-US holdings when the data says otherwise?

2 comments

2 Comments

stellafisher2d ago

You said "the data says otherwise" and I felt that in my bones, mostly because my own portfolio has been a sad little international flag waving in a hurricane of US gains. I keep telling myself diversification is for sleeping at night, but lately I've been sleeping just fine while my ex-US holdings take a nap too. Guess I'll just keep buying the whole world and hope my grandkids thank me for my stubborn loyalty.

tylerw922d ago

Yeah I get that completely. Watching your international stuff just sit there while US markets keep running is rough. Diversification is one of those things that sounds great in theory but in practice it can feel like you're just throwing money away. I've been there too with some of my own picks that just never seem to catch a break. All you can do is stick with the plan and hope the cycle turns back around eventually.