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  • Should we start a spinoff thread: "How High Can We Go?"?

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    • Originally posted by CordMcNally View Post
      Should we start a spinoff thread: "How High Can We Go?"?
      IDK, you may not want to give Cord an opinion?

      My turn:

      https://media1.giphy.com/media/ZaF4V...StQU/giphy.gif

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      • Dont_know_mind I've also increased international holdings (buy purchases, not rebalances). I've considered an Asia tilt, but haven't mustered up the courage.

        I am interested to see if the Fed decides to pull back on their "not raising rates" commitment. I honestly think that the short term hurt could be good for those of us savers in the long run (and maybe slow the PE acquisition of medicine...). But, as with all of this- speculative. It's fun to think about if you have a long horizon to retirement. Probably not as fun if about to transition into it.

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        • Originally posted by Brains428 View Post
          Dont_know_mind I've also increased international holdings (buy purchases, not rebalances). I've considered an Asia tilt, but haven't mustered up the courage.
          Can you tell me the difference in sector weighting of INTL vs US? I mean this partially in jest. Can you tell me which countries are in INTL and why you think the pot is going to outperform the USA? I can't, but I still keep INTL and EM allocations. Just because I know primarily the economies are not tied at the hip (more so recently) and have different risks. The point is the "know what you own" and with INTL my knowledge isn't as deep to choose to "tilt".

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          • Originally posted by Brains428 View Post
            Dont_know_mind I've also increased international holdings (buy purchases, not rebalances). I've considered an Asia tilt, but haven't mustered up the courage.
            I think if you buy the entire basket of ex-US (cap weighted), you are already getting a significant exposure to Asia even without adding an extra tilt. For example, VXUS, by my count, is over 40% Asia (led by China and Japan). Not sure if you really intend to add more than that.

            I do have an extra tilt to China for the moment (which luckily, has done really well since I entered those positions in late 2018) but for the most part, I'm aiming at reducing/eliminating those positions as I add total international for purposes of simplification, and because I've decided that I shouldn't be taking it upon myself to try and forecast which country's markets will do well and which won't.

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            • At this point, I can't. So, my lack of confidence comes from an overall lack of knowledge. So, to this point, I've done what most people do and have an allocation in total international and emerging markets. I try to be 80/20 US/International. As other times you've pointed out, chasing yield for the sake of chasing yield isn't a prudent decision if one doesn't understand the risks. So, I'll continue learning until I make a final decision.

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              • Originally posted by Perry Ict View Post

                I think if you buy the entire basket of ex-US (cap weighted), you are already getting a significant exposure to Asia even without adding an extra tilt. For example, VXUS, by my count, is over 40% Asia (led by China and Japan). Not sure if you really intend to add more than that.

                I do have an extra tilt to China for the moment (which luckily, has done really well since I entered those positions in late 2018) but for the most part, I'm aiming at reducing/eliminating those positions as I add total international for purposes of simplification, and because I've decided that I shouldn't be taking it upon myself to try and forecast which country's markets will do well and which won't.
                INTL can actually be split Europe and Asia Pacific. Those are actually different economic regions that are separate. Not worth digging into the weeds. Are you looking for geographic or economic diversification or tilt?

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                • Originally posted by Tim View Post

                  INTL can actually be split Europe and Asia Pacific. Those are actually different economic regions that are separate. Not worth digging into the weeds. Are you looking for geographic or economic diversification or tilt?
                  I'm not looking for anything. I was highlighting (to the person to which I was replying) that if one is buying an etf that follows a broad international index (VXUS, as an example), there is already a significant exposure to Asia.

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                  • Originally posted by Perry Ict View Post

                    I'm not looking for anything. I was highlighting (to the person to which I was replying) that if one is buying an etf that follows a broad international index (VXUS, as an example), there is already a significant exposure to Asia.
                    The reason I asked was based upon an old effort I made. Some literature does exist. The markets, economies and politics are completely different. I was looking for a way to try to tilt. I was looking to break out international to EUR, AP, and EM. Dead end, I didn’t find any advantage, just smaller pieces.

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                    • I see. I'm sure I'm not as knowledgeable about the literature as you are, but I've pretty much arrived at the same conclusion; it makes more sense (for me, at least) to just buy the basket, rather than carving everything into separate pieces by region or country.

                      I still may keep my mutual fund though (Matthews Asia), as well as my international small cap (VSS) tilt, but if you told me they won't do much for my portfolio and are needlessly complicating things, I wouldn't argue with you.

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                      • Originally posted by Larry Ragman View Post

                        Serious question: how things pan out by what measure? Total return over 1 year, 5 years, 10? I admire your willingness to lay out your position and if I were a bit younger and trying to pick winners (I don’t since I am diversified indexer) your choices might make sense given current conditions. But how often do you try to reposition?
                        I bought a property in 2019 and became worried I would not have funds in time to settle so liquidated index funds, which in retrospect was a mistake. But actually it turned out better than if I hadn’t as covid came along.

                        So with Covid, I was overweight cash and was lucky it occurred. In March I was very bearish and missed the bottom but allocated to international in April.

                        To answer your question, my holding period is indefinite. I intend to hold the index funds I bought forever if possible.

                        My aim is to get to 60:40 international/domestic.

                        I am at target international amount and intend to buy domestic indexes when the price is more reasonable but it may never get so. In which case, I have the option of paying off debt or buying more international.

                        In the meantime I bought forward 3 years of future investments so can just pay off debt if both international and domestic are hard to purchase more of in the next 3 years.

                        I’m still thinking about my strategy which is somewhat haphazard and I wouldn’t recommend it to anyone else.

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                        • Originally posted by Perry Ict View Post

                          I am also heavily international along with a lot of less popular (up until now) domestic indices (large value, small value/blend). It will be interesting to see if the last few days were just a head fake or the start of a new trend and rotation into value/international and away from the popular growth equities.
                          It may not be a robust rally until covid stabilises in the US and Europe.

                          I am up about 15% YTD which is not great compared to tech but I’m pretty happy with it and I’m comfortable holding what I have. I think the 2 main things are that a) you turn out to be roughly correct about expected long term returns and 2) you are comfortable holding it and can do so through grinding, turbulent markets.

                          The exchange rate risk is something to bear in mind with international. I am comfortable with this though.

                          Another interesting thing is rate expectations. I decided to fix my loan funding for 2 and 3 years this week. It will be interesting to see if I lose that bet. The other times I’ve fixed, I was better off not fixing, so my past record is not great there. It is one variable that you can get off the table and the risk maybe worth the cost to some.

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                          • Originally posted by Brains428 View Post
                            Dont_know_mind I've also increased international holdings (buy purchases, not rebalances). I've considered an Asia tilt, but haven't mustered up the courage.

                            I am interested to see if the Fed decides to pull back on their "not raising rates" commitment. I honestly think that the short term hurt could be good for those of us savers in the long run (and maybe slow the PE acquisition of medicine...). But, as with all of this- speculative. It's fun to think about if you have a long horizon to retirement. Probably not as fun if about to transition into it.
                            I haven’t sold anything to buy international recently and it has just been with purchases. I’m not sure what I would do if I had much SP500 or tech at this stage, I probably would have sold it in 2019 (which I did! But to settle on a property rather than overvaluation but maybe that was a reason too).

                            I think the low rates make it very hard to hold cash. I think the Fed will not raise rates in the next 2 years, but maybe they will. On the other hand it’s also hard to see rates going lower this cycle, but maybe it could!

                            I have been pretty hopeless at predicting rates so whatever investing decisions I make are I hope not dependent on getting that correct.

                            Comment


                            • Originally posted by Perry Ict View Post

                              I think if you buy the entire basket of ex-US (cap weighted), you are already getting a significant exposure to Asia even without adding an extra tilt. For example, VXUS, by my count, is over 40% Asia (led by China and Japan). Not sure if you really intend to add more than that.

                              I do have an extra tilt to China for the moment (which luckily, has done really well since I entered those positions in late 2018) but for the most part, I'm aiming at reducing/eliminating those positions as I add total international for purposes of simplification, and because I've decided that I shouldn't be taking it upon myself to try and forecast which country's markets will do well and which won't.
                              I think to have a major tilt to a country, ie 50%, I would not do it unless I had lived in that country for at least 5 years and maybe intend to retire there. I think you need a very deep knowledge of a country to tilt much to it. Sometimes I get attracted to the idea of tilting to the UK or Japan or some other cheapie but I couldn’t actually do it to any extent that would move the needle on my performance.

                              To me international is world index ex US.
                              The problem with having a variant portfolio is that you could be wrong. In my experience, you’re more likely to be wrong than right.

                              So I try to not make any bets where I would be hurt too much if I was wrong. At the moment the most I will vary my portfolio is being 100% international. Arguably this is too much of a bet and I should be at least 20% US. I have thought about this and what my actual risk tolerance is for underperformance. I often wonder recently whether I’ve missed something. But I’m comfortable holding it.

                              What I do worry about is the property I bought in 2019, which is development acreage leveraged to energy prices and tourism of all things. That is orders of magnitude greater risk than the international index tilting. It’s sort of crazy when I think about it. But I did buy it cheap so hopefully that margin of error was enough.

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                              • I debated posting this on the Covid thread but decided it was more market.
                                What would you think of a 4-6 weeks lockdown of the US? That is an economic recommendation in my view, not really healthcare. All based on new information that the “scientist” crosses lines and gets out of his expertise. There is a possibility that we could revisit the lows.

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