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What allocation do you have to international equities and your favorite funds?
Investing is difficult and humbling and I have difficulty making money in the market (US) I live in. My respects to all you guys trying to invest in far away lands.
"Isn't Intl investing really a currency play on a weaker dollar...which might be in our near future, no?"
Foreign currency weakness / strength against the dollar affects returns but there is more to the story.
S&P 500 companies derive a significant portion of their revenue overseas. However, some excellent companies are domiciled outside of America. I would like to own these companies.
Foreign stocks may provide diversification during longer periods where S&P 500 performance is dismal (e.g., 2000 - 2009).
Of course, diversification works both ways. Foreign stocks have lagged U.S. stocks for approximately 15 years. This is an unusually long period and U.S. / foreign stock outperformance tends to run in cycles.
Sorry being late to this discussion. Our oversea exposure is about 7-8%, with mostly actively managed funds and ETFs. In taxable account, VEA and DIVI are the only one we use and they are tax efficient.
1. For large cap developed market, ARTKX and FMIJX are the main vehicles. 2. Lately CCGO was added to gain exposure to the “growth” stocks in Europe as BF mentioned the “Fantastic Five”. Capital fund does a good job so far managed the downside risk than that of Vanguard Int’l growth (we moved on when Ian Anderson retired). 3. For EM exposure, we have 2% and it is getting smaller; largely invested in Seafarer funds with Andrew Foster and his teams. 4. The only stake on int’l small caps we have is Seafarer EM Value. 5. We continue to seek actively managed funds and ETFs with lower ER; preferable less than 1%. 6. Back in the 80-90’s when US currency was less dominated to other currencies, many international funds often out-performed the US counter-parts. This has changed in the last 10 years as it reflects in our lowered exposure. 7. In our 529 plan, Vanguard Total International stock index fund is used as part of the portfolio but we have limited choice there. Preferably, the Total Stock Market index would be better.
Strong dollar hurts foreign funds held by the US investors and also the US multinationals' earnings. There are global mega-cap ETFs like IOO; note post GFC divergence. https://tinyurl.com/495xv6yj
5.54% foreign. Not by choice. My fund managers put my money there. So, I'm very limited re foreign stuff. But 41% in bonds. YIELD on full portfolio is 4.05%. Liking that. Age 70 is coming in late July. Holding very small bites in Canada and Luxembourg, single stocks.
14% developed, 1% emerging markets. Currently reducing exposure by switching out some pure Internationals for 60/40 globals. I think that there is likely more overall potential lurking in foreign markets than in the possibly somewhat over-valued US, but it's important to invest with skillful managers who can find it in this higher risk arena, or at least a very strict and well constructed specific index.
Insightful, but does the current US/Euro gap indicate future trend or represent a possible turning point? One thing for sure, the US will not stay this far ahead forever. There is good growth in the US, but possibly better value may be found overseas.
It says that "Mr. Draghi’s report will not be released until after voters across the European Union’s 27 states go to the polls this week to elect their parliamentary representatives." Those elections were a week ago. It may be worth looking for his report.
If China is doing so well, should one be investing more in China, despite the political risks involved?
With respect to investing in Europe, or in any company with suboptimal prospects: it can be a good investment if the price is right. Fundamentally, a stock is priced according to its expected future earnings discounted to present value. Lower expectations (due to slower growth), lower present value.
Insightful, but does the current US/Euro gap indicate future trend or represent a possible turning point? One thing for sure, the US will not stay this far ahead forever. There is good growth in the US, but possibly better value may be found overseas.
Ya, I ventured overseas years ago. The "old saw" was that Europe was "old money." I was looking for a bargain. And I had some EM holdings, too. These days, Europe is even more complicated: Ukraine war, Right-wing election gains. One currency, but many different national budgets.... I did well investing in EM bonds through the GFC and for a while beyond, and then I got out, following some good advice from someone inhere.
Politically, China is uninvestable these days. Authoritarian. Curtailed civil and human rights. They're putting the screws to "special territories" Hong Kong and Macau, too. After having visited there in early 2019, it makes me so sad and angry to see it happening. The Markets have no conscience. But this whole business in China is morally distressing. I'm sworn off of foreign investments in my mutual funds; funds are still the lion's share of what I own. My fund managers have me in UK and Europe, just a tiny bit. I own a Canadian stock with a great dividend; is that "foreign?" Also, a Luxembourg-based maker of oil drilling pipes. Two still very tiny single-stock holdings. In retirement, I like YIELD. My (junk) bond funds provide most of that. Keeping a close eye on them--- a "short leash." Currently, my portfolio provides a 4.05% yield, as calculated by the ever-reliable (LOL) Morningstar.
I was surprised by Zakaria’s claim that Britain’s per-capita GDP is lower than that of any of our 50 states.
Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried. But I suspect others may not share that level of patience..
Not to be overlooked, the dollar’s persistent strength has also dinged investments in Europe and elsewhere.
As US-based companies earn revenues in other countries so do foreign-based companies earn revenues in the US. I’d be curious to see how public company revenues break down based on where the company is legally domiciled. Does anyone know of any data sources where this might be found? My Google-fu is failing me.
"Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried."
The optimal portfolio is only known in hindsight. Diversification means always having to say you're sorry about some investment in your portfolio!
Diversification means always having to say you're sorry about some investment in your portfolio!
Thanks @Observant1. I’m quite fond of Love Story with Ali MacGraw and Ryan O’Neil having first seen it around ‘71, a few years after graduating from college.
Agree @Old_Joe / I’d say Brexit played a big part. Humans worldwide appear equally adept at shooting themselves in the foot. (or is it feet?) We enjoy no monopoly in that regard.
@msf said, ”If China is doing so well, should one be investing more in China, despite the political risks involved?”
That would be a contrarian bet for sure. All my sources (various financial writers / commentators / pundits) are really down on China as an investment, chiefly because of what they see as deterioriating relations with the U.S. However, in Orwell’s 1984 alliances were constantly shifting - sometimes overnight. So one never knows. And TMWOT the pundits as a group are wrong more often than they are correct on the big issues.
As US-based companies earn revenues in other countries so do foreign-based companies earn revenues in the US. I’d be curious to see how public company revenues break down based on where the company is legally domiciled. Does anyone know of any data sources where this might be found? My Google-fu is failing me.
This link brings up a company that claims to provide such data. Unfortunately, it is a paid service. With really tough questions I go to Bing and then access their “Co-Pilot” AI on a “trial” basis. Suspect one might bring up the data you seek (likely piece-meal) if they played around long enough. For that matter, any open source AI might be helpful.
”How the US Mopped Up a Third of Global Capital Flows Since Covid “
(Excerpt) “In the face of calls around the world to diversify out of the dollar in recent years, the US has nabbed almost one-third of all the investment that flowed across borders since Covid struck. An International Monetary Fund analysis sent by request to Bloomberg News shows that the share of global flows has climbed — not fallen — since a shortage of dollars in 2020 spooked global investors and the 2022 freezing of Russian assets stoked questions about respect for free movement of capital. The pre-pandemic US average share was just 18%, according to the IMF. “
Article by Enda Curran and Saleha Mohsin - Bloomberg Media / June 16, 2024
Very late to the game here - I hold 2% in international equities mostly hidden in various domestic ETF's (e.g. CGDV) or CEF's. Some also contained in AVGE.
Diversification means always having to say you're sorry about some investment in your portfolio!
I liked this one. Goes on the fridge.
Like a few others here, I am having trouble opening up my wallet to buy much at current asking prices - especially when I can expect to earn 5% in cash.
"Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried."
The optimal portfolio is only known in hindsight. Diversification means always having to say you're sorry about some investment in your portfolio!
Your best observation ever. And no need for hindsight. I have concentrated in the right categories since 1995. See (link).
Just a small example: since 11/2023, I have posted many times to own US LC tilting growth and not diversifying. See my post from 11/1/2023 (link) "You can just play it simple: no diversification, no predictions, no narrow range funds, looks like tilting LC growth is here to stay which = SPY/VOO or you can gamble and use some QQQ." Why I posted the above? my system told me. See the chart(https://schrts.co/MWCuZUMV)
One of my fundamental rules is never to hold a fund that is not performing well. It doesn't mean #1, it means in the top 30% based on risk-adjusted performance. It's much easier when you have 3 funds, it's a lot harder with 10-15 funds.
Comments
@wabac, sent you a PM.
Foreign currency weakness / strength against the dollar affects returns but there is more to the story.
S&P 500 companies derive a significant portion of their revenue overseas.
However, some excellent companies are domiciled outside of America.
I would like to own these companies.
Foreign stocks may provide diversification during longer periods
where S&P 500 performance is dismal (e.g., 2000 - 2009).
Of course, diversification works both ways.
Foreign stocks have lagged U.S. stocks for approximately 15 years.
This is an unusually long period and U.S. / foreign stock outperformance tends to run in cycles.
1. For large cap developed market, ARTKX and FMIJX are the main vehicles.
2. Lately CCGO was added to gain exposure to the “growth” stocks in Europe as BF mentioned the “Fantastic Five”. Capital fund does a good job so far managed the downside risk than that of Vanguard Int’l growth (we moved on when Ian Anderson retired).
3. For EM exposure, we have 2% and it is getting smaller; largely invested in Seafarer funds with Andrew Foster and his teams.
4. The only stake on int’l small caps we have is Seafarer EM Value.
5. We continue to seek actively managed funds and ETFs with lower ER; preferable less than 1%.
6. Back in the 80-90’s when US currency was less dominated to other currencies, many international funds often out-performed the US counter-parts. This has changed in the last 10 years as it reflects in our lowered exposure.
7. In our 529 plan, Vanguard Total International stock index fund is used as part of the portfolio but we have limited choice there. Preferably, the Total Stock Market index would be better.
There are global mega-cap ETFs like IOO; note post GFC divergence.
https://tinyurl.com/495xv6yj
Dev. Europe 4.88%
Dev. Asia 0.3%
5.54% foreign. Not by choice. My fund managers put my money there. So, I'm very limited re foreign stuff. But 41% in bonds. YIELD on full portfolio is 4.05%. Liking that. Age 70 is coming in late July. Holding very small bites in Canada and Luxembourg, single stocks.
Europe Has Fallen Behind the U.S. and China. Can It Catch Up?
https://www.nytimes.com/2024/06/05/business/economy/europe-economy-competitiveness.html
It says that "Mr. Draghi’s report will not be released until after voters across the European Union’s 27 states go to the polls this week to elect their parliamentary representatives." Those elections were a week ago. It may be worth looking for his report.
If China is doing so well, should one be investing more in China, despite the political risks involved?
With respect to investing in Europe, or in any company with suboptimal prospects: it can be a good investment if the price is right. Fundamentally, a stock is priced according to its expected future earnings discounted to present value. Lower expectations (due to slower growth), lower present value.
https://philschatz.com/economics-book/contents/m48834.html
Politically, China is uninvestable these days. Authoritarian. Curtailed civil and human rights. They're putting the screws to "special territories" Hong Kong and Macau, too. After having visited there in early 2019, it makes me so sad and angry to see it happening. The Markets have no conscience. But this whole business in China is morally distressing. I'm sworn off of foreign investments in my mutual funds; funds are still the lion's share of what I own. My fund managers have me in UK and Europe, just a tiny bit. I own a Canadian stock with a great dividend; is that "foreign?" Also, a Luxembourg-based maker of oil drilling pipes. Two still very tiny single-stock holdings. In retirement, I like YIELD. My (junk) bond funds provide most of that. Keeping a close eye on them--- a "short leash." Currently, my portfolio provides a 4.05% yield, as calculated by the ever-reliable (LOL) Morningstar.
Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried. But I suspect others may not share that level of patience..
Not to be overlooked, the dollar’s persistent strength has also dinged investments in Europe and elsewhere.
The optimal portfolio is only known in hindsight.
Diversification means always having to say you're sorry about some investment in your portfolio!
@hank - No surprise there- their GDP has been subpar for many years, and Brexit certainly didn't help.
Thanks @Observant1. I’m quite fond of Love Story with Ali MacGraw and Ryan O’Neil having first seen it around ‘71, a few years after graduating from college.
Agree @Old_Joe / I’d say Brexit played a big part. Humans worldwide appear equally adept at shooting themselves in the foot. (or is it feet?) We enjoy no monopoly in that regard.
That would be a contrarian bet for sure. All my sources (various financial writers / commentators / pundits) are really down on China as an investment, chiefly because of what they see as deterioriating relations with the U.S. However, in Orwell’s 1984 alliances were constantly shifting - sometimes overnight. So one never knows. And TMWOT the pundits as a group are wrong more often than they are correct on the big issues.
This link brings up a company that claims to provide such data. Unfortunately, it is a paid service. With really tough questions I go to Bing and then access their “Co-Pilot” AI on a “trial” basis. Suspect one might bring up the data you seek (likely piece-meal) if they played around long enough. For that matter, any open source AI might be helpful.
”How the US Mopped Up a Third of Global Capital Flows Since Covid “
(Excerpt) “In the face of calls around the world to diversify out of the dollar in recent years, the US has nabbed almost one-third of all the investment that flowed across borders since Covid struck. An International Monetary Fund analysis sent by request to Bloomberg News shows that the share of global flows has climbed — not fallen — since a shortage of dollars in 2020 spooked global investors and the 2022 freezing of Russian assets stoked questions about respect for free movement of capital. The pre-pandemic US average share was just 18%, according to the IMF. “
Article by Enda Curran and Saleha Mohsin - Bloomberg Media / June 16, 2024
Tickled Me Wet On Top?
Tues-Mon-Wed-ORK-Trot?
Terrible Minced Water Off Turkeys?
Like a few others here, I am having trouble opening up my wallet to buy much at current asking prices - especially when I can expect to earn 5% in cash.
I would have guessed "too much worthless obscure talk", but I'd never let Crash know that I thought that.
I have concentrated in the right categories since 1995. See (link).
Just a small example: since 11/2023, I have posted many times to own US LC tilting growth and not diversifying. See my post from 11/1/2023 (link)
"You can just play it simple: no diversification, no predictions, no narrow range funds, looks like tilting LC growth is here to stay which = SPY/VOO or you can gamble and use some QQQ."
Why I posted the above? my system told me. See the chart(https://schrts.co/MWCuZUMV)
One of my fundamental rules is never to hold a fund that is not performing well. It doesn't mean #1, it means in the top 30% based on risk-adjusted performance. It's much easier when you have 3 funds, it's a lot harder with 10-15 funds.