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International Diversification Is Rising But Still Slow
Thanks Ted for this link. Though many companies have international exposure, I firmly believe in have a decent portion of the equity allocation dedicated to international companies. 30-40% would be my option. I currently have 37% international.
I'm a little over 35% overall according to M*. 25% of IRA is in DODWX, 15% in GPROX, 10% in MAPIX. I let those fine people make the specific allocation calls. 30% of 401(k) is in VDMIX, or whatever they changed it to. Also whatever int. bonds are in DODIX.
If memory serves, 25-30% is the diversification "free lunch zone." Someone else probably knows better.
This house is 45%, up from 35% last year on valuation. About a third of the 45% is U.S.-dollar hedged. I like the company, country, and culture diversification a lot; the currency risk, not as much.
My core portfolio maintains 40% developed international and 10% EM at all times. Use the play money portfolio to hedge at times with leveraged funds or country funds. For example, currently 2x short positions in S&P 500 and Small cap and China, long Australia and Italy.
Comments
I'm interested to hear what others have.
If memory serves, 25-30% is the diversification "free lunch zone." Someone else probably knows better.