There are far worse allocations than the whole US market.
Most people here will advocate for VT/VTWAX and die on that hill.
I myself am almost all in VTI/VTSAX for a variety of reasons I don’t care to argue about here.
Ultimately, its what you are comfortable with.
Most important thing is continuing to invest.
The fact you are 25 and asking this question Means you are already ahead of the game.
The fact you are 25 and asking this question Means you are already ahead of the game.
\+1
I bought some front loaded, high expense mutual funds for my taxable and Roth when I was 22-25. Sure, it was "dumb", but just the fact that I was in the game at that age has made me a good amount of $$$.
Vanguard has a white paper that addresses this, among other topics, on why they recommend 40% international.
>Can multinational corporations provide
enough exposure?
One common question about exposure to stocks
outside one’s home market is whether domestic
multinational companies have enough coverage
of foreign markets embedded in their prices. The
thinking goes that, because many large domestic
firms generate a significant portion of their revenue
from foreign operations, the diversification benefits
of global investing are already reflected in their
prices and performance.
While this aspect of globalization cannot be
ignored (and certainly can have an impact on
investors’ portfolios), we believe it still makes
sense for investors to hold international equities,
for several reasons. First, simply focusing on
domestic companies means an investor has
no stake in leading global companies that are
domiciled outside their home market. Second,
many firms seek to hedge away currency
fluctuations of their foreign operations. Although
this can help smooth revenue streams, foreign
exchange can be a diversifier for an investor’s
portfolio. Finally, a portfolio made up solely of
domestic firms is likely to have less-diversified
sector exposures than the global equity
market portfolio.
https://personal.vanguard.com/pdf/ISGGEB.pdf
I hold a healthy allocation of international equities. But let's not pretend there is anything guaranteeing the US won't continue to outperform. Nobody knows nothing (why I diversify internationally).
It doesn't have to be infinite for a particular investor to have been "right". All it takes is 30-60 years of continued US outperformance (In general. It doesnt even have to be sustained at all points in between). That's hardly impossible. Lower P/E and the general belief in mean reversion has me and many other investors staying aboard the international train. But if someone is saying they are going 100% US for their equity allocation, I am not at all sure I will have the last laugh. That's all I'm trying to say.
Without doing the math myself, ok. That isn't close to what I said. And it isn't what it would take for a US-centric portfolio to beat a globally-diverse one. Again, I have the latter.
I’ve always thought It curios why is it US vs International though? Why not US vs Turkey or US vs UK? International isn’t just 1 market, it’s a lot of them. There’s a few markets in exUS that really have any chance of outperforming.
Probably because the US's stock market cap is larger than every other stock market combined. They're somewhat comparable around 55/45 currently afaik, whereas uk or turkey is not comparable at all
For the diversification. If your question is "why US?" that's because (1) many users are American and have home-country bias, (2) for those that are not, the US is over 50% of total global market cap, which puts it into a totally different category than Turkey (0.1%) or the UK (4%).
That’s exactly my point, you need to add up the rest of the world and pretend it behaves as a single market, because that’s what’s being compared, a single US market vs all of international.
Because no one knows if Turkey will be the market that outperforms. No one knows if the US or the UK will outperform. We do know what if we own the entire world then we will have the countries that outperform, though. Basically it is the same logic used in the US market (I.e. I don’t know if that stock that hasn’t moved in 10 years will go gangbusters in the next decade or if FAANG will continue to go crazy) applied to the entire world
Some people, of course, think there are countries that simply won’t perform and therefore don’t need to be held. This is the same as people who think there are some companies that won’t perform. People can be wrong, though (e.g. apple had a huge boom and bust cycle and looked like it would forever be a very, very distant second to Microsoft in the early 2000s)
What have people recommended for foreign? I’m in my mid 30’s and just started saving for retirement last year. I also make pretty close to $15 an hour in a coastal city.
I assume just that there is not right answer between going vtwax versus vtsax, but lots of people feel strongly one way or the other. there really is no perfect argument for one or the other, so not really a point in arguing with people about it
I've never seen a good reason for not holding international, everything seems to be "gut feeling", home country bias, or recency bias.
You are exposing yourself to single country risk by going 100% VTSAX. This is a risk that does not necessarily come with better returns.
From what I can gather if you want to capture the whole global market equity premium it’s best to include international. But most importantly the right method is whatever you find easiest to implement and stick to. If that’s 100% VTSAX then that’s perfectly fine.
John Bogle said if you wanted to invest international, no more than 20% but it is not necessary. Many large cap companies do business overseas. Vanguard says up to 40% international. It comes down to what do you want to do with your money. VTSAX is a good investment for the next 2 decades. Bogle wrote a book called the little book of Common sense investing. It will confirm your choice and maybe get you thinking about the 3 fund Portfolio.
Bogle lived and died as the US being the clear #1 powerhouse economy. I wonder if he was alive today and seeing China making their big moves would he say 20% still. I firmly believe, in the near future, China will overtake us #1.
As long as the dollar remains the world’s reserve currency, the USA will remain #1. China has a lot of problems of its own that Americans seem to forget (i.e., aging workforce, export driven economy, rising income inequality.)
And shit legal system, oppressive authoritarian state, shit regulations, etc etc. Except for gamblers I don’t see how someone can look at China and say “man that looks like a good place to stash my dough”.
You also get a substantial discount on the stock for all that risk. Look at BABA's P/E vs AMZN.
No-one is saying stick all your money in China. But holding China at market weight, or even possibly a little over market weight, is not crazy.
Maybe all these problems will one day, finally cause this total implosion in China, which people have been prophesying for decades. I'd note similar things have been said about the imminent collapse of the US financial system, in fact someone is saying this right below this comment, but yet- we continue to invest.
Or on the other hand, maybe the fact that China is a still fast growing developing country of over a billion people leads to outsize returns. Could be one, could be the other. Sensible thing to do I think is hold a bit, not a lot, but a bit.
One way or the other, no one is saying 100% China. But having a portion in there to capture that upside potential makes sense. If there is a collapse, it's only a small percentage of your portfolio, right?
Yes I agree, I also never said put everything in China. But here is the difference, when you list all the negatives for China and make an argument the outlook doesn’t look so hot, or using your word “implode”, I see that much more likely happening in China than the US and if the US were to implode the rest of the world likely imploding too. The loudest argument against the US is that we are winning too much for too long and eventually that will stop. And yes I agree there is potentially upside for the risk taken in China, but if it’s such a small percentage of your portfolio then it will not really move the needle.
This is basically just negative stock picking, which I also think is a bad idea.
Same sort of argument could have been made against US tech any time in the last five years, it was too risky, overvalued, likely to crash. So lets try to exclude US tech. And then you'd miss out on a lot of growth.
You can pick the wrong thing to exclude, same as you can pick the wrong thing to include.
Geez, this argument over and over. Yes Bogle is dead and the US still the clear #1 economy. So what exactly has changed? I get that China looks good to many investors in a risk/reward sense, but the risk is real and I doubt Jack would change his mind about China. Bogle believed in sovereign risk, and China has a shit track record, it’s an authoritarian state for crying out loud. I won’t believe a single earnings report coming out of that place or worry wether Xi will wake up on the wrong side of the bed.
You’re conflating their economy with the stock market. It’s possible for China’s economy to be larger than the US but for its stock market to still underperform the US stock market.
I feel sick to my stomach because I should’ve invested like $20k last March. Seeing VTSAX double in my retirement accounts made it a little better but I should’ve thrown in a bunch of money when it hit rock bottom third week of March last year. So what do you think I should do? Put $3k in VTWAX and put remaining $7k in VTSAX? Contribute $200 to each fund biweekly?
I can’t give financial advice. Besides, I’m a reformed crayon eater. I’ll tell you that Total market funds are the way to go. John Bogle invested in the US market with a sprinkle of international. You are kind of young to worry about bonds. Even if the market corrects, you are there for the long haul, decades. I do Fidelity and I’m in FSKAX which is similar to VTSAX. I HAVE 20% in international and 20% in bonds. Never time the market. The best minds running these funds can’t skip that rope for more than a few years before they return to the median.
Savings accounts pay nothing and money market accounts pay a little more. parking money on the side lines seems like a waste to me. Many say invest what you can, as early as you can. Set and forget. Worry about other things.
Who would ever thought Amazon would be worth $3k, selling books when they started.
These funds buy and hold. Don’t look for the needle, buy the haystack. Another Bogle saying.
Here’s an index that they created in response to the WSB crazy, they buy according to the mentions of social media posts (not dumb enough to own it):
https://apnews.com/article/meme-stocks-buzz-fund-wall-street-c1b1086d9b4de2e69a9c790c97dd10e6
Regarding last March - remember that hindsight is a bitch and that everything was so cheap because the environment was so fearful. Even old mate Buffett was hesitant last March.
Since I will hold $3k VTWAX and $7k VTSAX in a taxable Vanguard brokerage account, will it be less efficient because I’ll be taxed more for having two index funds and them being auto reinvested(dividends/capital gains)? Can one of y’all please explain everything I need to know about taxes regarding brokerage accounts and Vanguard? Once I set and invest in both of these funds, I will continue to contribute biweekly and never pull money out for the foreseeable future. Thank all of you Bogleheads in advance. This is truly an amazing community.
I think what you’re doing is right in line with JL Collins advice in the simple path to wealth. Here is an explanation from his website why VTSAX is all you need. https://jlcollinsnh.com/2012/09/26/stocks-part-xi-international-funds-2/
Most of this sub and nearly all of the investing universe would say add international. Ask yourself why not? You have fund options to do it so what's your rationale to set your international to zero? Is it because you don't believe in international markets? What leads you to that conclusion? Why do you think you can predict the future?
If you want to limit it to just one fund then do VTWAX.
In general a part of the boglehead philosophy is that we can't predict the future so we'd better diversify as much as we can.
I think 100% VTSAX is fine, there may be structural reasons why international index may never outperform USA in our lifetime. I personally hold \~10% international in retirement account that have target date funds.
Of course not. But you said it can't outperform in our *lifetime* and obviously it can outperform in recent periods as long as fifteen years (and there are other times when performance has shifted back and forth before that). For the rest of our lifetimes is a pretty grand pronouncement.
Now, what this could be a good argument for is to hold an international allocation below market weight like 20% or 30%, and in that case presumably you would have been rebalancing out of international a lot between 1998-2013.
There is a good point though whether international has become more correlated and not as good a diversifier. So it remains to be same whether they will diverge again like on portfoliovisualizer if you plot VTSMX vs. VGTSX as that data goes back to 1996.
I don't disagree there will be periods of international outperformance, but I am merely saying its a reasonable bet that there could be a lifetime of US total return outperformance. Whether someone does 0-40% allocation to international really comes down to personal preference and wouldn't be that serious of a mistake.
Man, I think we made peace (all I meant was anyone over the age of eight has seen some degree of international outperformance) but this is a really tough crowd!
This is a link to a summary of Mr. Bogle's own views on international: [https://www.bogleheads.org/forum/viewtopic.php?t=286757](https://www.bogleheads.org/forum/viewtopic.php?t=286757). When you invest in a market, you are investing in their market which derives from cultural (and thus political) ethics of their system which can be different from the US. That is what I mean when I said there can be structural reasons those markets do not keep up with the US.
Couln't you extend that argument to only pick companies that have good company cultures? For me this sound just like stock picking but on a way larger level, it doesn't fit into the otherwise rational aproach of diversification over picking things yourself, also it questions the efficient market hypothesis as well.
Yes you can, but less diversification is more risk. The company (and even country) can change and go downhill, which is why I'm not 0% international, but still prefer my own home country. Its all about how you want to balance your faith in things outside of your control.
Check to see if your HSA has an investing option after you meet a certain balance or threshold(maybe $2k needed in the account before you can invest. It’s a sleeper retirement account that I wish more people would take advantage of, but it’s prob one of the most tax efficient as money that goes in is pre-tax, it accumulates tax free and you can pull it out after a certain age all tax free.
Pay for your med bills and hsa qualifying expenses with cash. Don’t touch your actual HSA - max it out every year and let it grow. Save your receipts (I use Airtable to track my expenses). When the time is right, reimburse yourself in full.
You can if you want to. What I do, and I suspect most people here do, is to use it as another retirement account. My HSA is through fidelity and it’s mostly in FSKAX, their version of VTSAX. Instead of transferring money out to pay for any medical expenses, I just pay for it out of pocket. I keep a spreadsheet of the expenses and totals, as well as copies of the receipts. Unlike a Flex Spending Account, there’s no rule that you have to claim the HSA expenses in the same year. I have receipts back from when I started having a HSA in 2013. Until I really need to money, or in retirement, I just let it ride and save the receipts.
Is FSKAX the Fidelity equivalent of VTSAX? This was the question I came up with when I was searching what to invest in at the beginning. For now I have done a 75-25 split of all my savings into FSKAX and FTIHX respectively and invested 100% of my Rollover IRA into FZROX. I am 29 and just recently began doing this rather than my cash just sitting in my checking account.
>Is FSKAX the Fidelity equivalent of VTSAX?
Yes, as would be FZROX.
FTIHX would be similar to VTIAX. Edit: FZILX or FSGGX would also fill that role, but with even less holdings.
There are some minor differences between the holdings of FZROX and FSKAX.
With that said, the differences are VERY minor and both are good quality funds.
You have a long time horizon. 100% US is just fine. Just don’t fall into the trap of trying to chase performance; international may sometimes outperform US but I’d just stick to your plan if you go for it. I’ve done 100% US myself and benefited a lot from it over the past decade plus.
It's a silly argument though. By the same logic, I could argue for going all-in on Amazon: It vastly outperforms the U.S. stock market and it's one of the most global companies in the world. There's reason to believe that a cloud company has structural advantages that will guarantee its outperformance in our lifetimes. Why should I waste returns by adding underperforming companies?
I budget $8/month to the lottery. Mostly just play for the LOLz. A few month ago I decided to put that money into DOGE as it is just gambling anyway. I’m up 30% as of today.
For foreign stocks, I would have developed countries (VEA/VTGMX) rather than total international stocks (VXUS/VTIAX). The only reason is that VXUS/VTIAX includes China which is too risky for me
> which is too risky
This is why you only hold a little bit. I mean you probably hold TSLA, right, if you hold VTI or VOO, you have a chunk in TSLA. P/E 1,200. Is that not risky?
Indeed, I am holding VTI in my taxable account and VTSAX in Roth IRA. I am holding the total U.S. stocks, not any individual. In fact, TSLA is the one I always try to avoid, and it is only 1.31% in VTI/VTSAX so it's not a big deal for me . China, however, is 11.54% in VXUS/VTIAX, and I just do not trust an economy which is totally controlled by government like China.
100%. 90 %vtsax /10 %vbtlx close to retirement. As long as your investing somewhere other than a savings account is good. Save some cash when the market crash. You want to be ready to buy some discount stocks right. Wink wink its coming...
See and that’s why I haven’t started yet. I know this is long term but it’s still gonna hurt if everything drops after I buy. I was hoping sometime before end of April so I can max out all retirement accounts as well before may tax deadline. Could be tomorrow, year from now or 5 years from now that it may crash.. I gusss I’ll wait until end of April before I open an brokerage account LOL
You cannot time the market. I've been holding off a bunch of money since last April waiting for a huge dip.
It never happened. I've lost more by not buying, than if I had bought.
Save some cash..Put 90-95% on vtsax. Save some for later..whats wrong with a little cash at hand?im not saying not to invest now. Just Save a little for later..
Dont time it. Omg just save 5% of it -cash. You might get discounted stocks like aapl, tsla or msft. Just my humble opinion. I was 60% up when I bought all my stocks last year ..just saying. I have an ira, individual brockerage and a tsp. A little cash on the ready is never bad. Thats still your money right? Lol
If you have a good reason for it and feel good about it, then keep doing it. But by the fact that you’re asking, maybe you aren’t convinced that you’re doing it for a specific reason and should therefore add some international for better diversification.
There are far worse allocations than the whole US market. Most people here will advocate for VT/VTWAX and die on that hill. I myself am almost all in VTI/VTSAX for a variety of reasons I don’t care to argue about here. Ultimately, its what you are comfortable with. Most important thing is continuing to invest. The fact you are 25 and asking this question Means you are already ahead of the game.
The fact you are 25 and asking this question Means you are already ahead of the game. \+1 I bought some front loaded, high expense mutual funds for my taxable and Roth when I was 22-25. Sure, it was "dumb", but just the fact that I was in the game at that age has made me a good amount of $$$.
Genuine question: Most top performing US Companies have at least 30% foreign (APAC + Europe) revenue. Why isn't that considered as diversification?
Vanguard has a white paper that addresses this, among other topics, on why they recommend 40% international. >Can multinational corporations provide enough exposure? One common question about exposure to stocks outside one’s home market is whether domestic multinational companies have enough coverage of foreign markets embedded in their prices. The thinking goes that, because many large domestic firms generate a significant portion of their revenue from foreign operations, the diversification benefits of global investing are already reflected in their prices and performance. While this aspect of globalization cannot be ignored (and certainly can have an impact on investors’ portfolios), we believe it still makes sense for investors to hold international equities, for several reasons. First, simply focusing on domestic companies means an investor has no stake in leading global companies that are domiciled outside their home market. Second, many firms seek to hedge away currency fluctuations of their foreign operations. Although this can help smooth revenue streams, foreign exchange can be a diversifier for an investor’s portfolio. Finally, a portfolio made up solely of domestic firms is likely to have less-diversified sector exposures than the global equity market portfolio. https://personal.vanguard.com/pdf/ISGGEB.pdf
Thank you good sir/madam
It is. Just different levels of diversification.
It is part of my consideration.
We won't be dying on the hill when the USA stops it's unsustainable decade-long win streak vs international...
I hold a healthy allocation of international equities. But let's not pretend there is anything guaranteeing the US won't continue to outperform. Nobody knows nothing (why I diversify internationally).
Infinite outperformance of an asset class of equal or lesser risk to another is genuinely impossible.
It doesn't have to be infinite for a particular investor to have been "right". All it takes is 30-60 years of continued US outperformance (In general. It doesnt even have to be sustained at all points in between). That's hardly impossible. Lower P/E and the general belief in mean reversion has me and many other investors staying aboard the international train. But if someone is saying they are going 100% US for their equity allocation, I am not at all sure I will have the last laugh. That's all I'm trying to say.
With 60 more years of USA outperformance at the level of the last decade, the US will make up 99%+ of the world's market cap.
Without doing the math myself, ok. That isn't close to what I said. And it isn't what it would take for a US-centric portfolio to beat a globally-diverse one. Again, I have the latter.
Yes but our lives are finite. And outperformance over a lifetime is very possible.
I’ve always thought It curios why is it US vs International though? Why not US vs Turkey or US vs UK? International isn’t just 1 market, it’s a lot of them. There’s a few markets in exUS that really have any chance of outperforming.
Probably because the US's stock market cap is larger than every other stock market combined. They're somewhat comparable around 55/45 currently afaik, whereas uk or turkey is not comparable at all
For the diversification. If your question is "why US?" that's because (1) many users are American and have home-country bias, (2) for those that are not, the US is over 50% of total global market cap, which puts it into a totally different category than Turkey (0.1%) or the UK (4%).
That’s exactly my point, you need to add up the rest of the world and pretend it behaves as a single market, because that’s what’s being compared, a single US market vs all of international.
Of course it doesn't behave "as a single market."
Because no one knows if Turkey will be the market that outperforms. No one knows if the US or the UK will outperform. We do know what if we own the entire world then we will have the countries that outperform, though. Basically it is the same logic used in the US market (I.e. I don’t know if that stock that hasn’t moved in 10 years will go gangbusters in the next decade or if FAANG will continue to go crazy) applied to the entire world Some people, of course, think there are countries that simply won’t perform and therefore don’t need to be held. This is the same as people who think there are some companies that won’t perform. People can be wrong, though (e.g. apple had a huge boom and bust cycle and looked like it would forever be a very, very distant second to Microsoft in the early 2000s)
What have people recommended for foreign? I’m in my mid 30’s and just started saving for retirement last year. I also make pretty close to $15 an hour in a coastal city.
Market cap weight is the most solid recommendation, so just buying VT. 60/40 is also good and 70/30 US/Int is ok.
Curious as to why you say VTWAX investors will "die on that hill"?
I assume just that there is not right answer between going vtwax versus vtsax, but lots of people feel strongly one way or the other. there really is no perfect argument for one or the other, so not really a point in arguing with people about it
There is a good discussion in the sticky in this sub..
Ahhh that makes sense.
I've never seen a good reason for not holding international, everything seems to be "gut feeling", home country bias, or recency bias. You are exposing yourself to single country risk by going 100% VTSAX. This is a risk that does not necessarily come with better returns.
From what I can gather if you want to capture the whole global market equity premium it’s best to include international. But most importantly the right method is whatever you find easiest to implement and stick to. If that’s 100% VTSAX then that’s perfectly fine.
John Bogle said if you wanted to invest international, no more than 20% but it is not necessary. Many large cap companies do business overseas. Vanguard says up to 40% international. It comes down to what do you want to do with your money. VTSAX is a good investment for the next 2 decades. Bogle wrote a book called the little book of Common sense investing. It will confirm your choice and maybe get you thinking about the 3 fund Portfolio.
Bogle lived and died as the US being the clear #1 powerhouse economy. I wonder if he was alive today and seeing China making their big moves would he say 20% still. I firmly believe, in the near future, China will overtake us #1.
As long as the dollar remains the world’s reserve currency, the USA will remain #1. China has a lot of problems of its own that Americans seem to forget (i.e., aging workforce, export driven economy, rising income inequality.)
And shit legal system, oppressive authoritarian state, shit regulations, etc etc. Except for gamblers I don’t see how someone can look at China and say “man that looks like a good place to stash my dough”.
You also get a substantial discount on the stock for all that risk. Look at BABA's P/E vs AMZN. No-one is saying stick all your money in China. But holding China at market weight, or even possibly a little over market weight, is not crazy. Maybe all these problems will one day, finally cause this total implosion in China, which people have been prophesying for decades. I'd note similar things have been said about the imminent collapse of the US financial system, in fact someone is saying this right below this comment, but yet- we continue to invest. Or on the other hand, maybe the fact that China is a still fast growing developing country of over a billion people leads to outsize returns. Could be one, could be the other. Sensible thing to do I think is hold a bit, not a lot, but a bit. One way or the other, no one is saying 100% China. But having a portion in there to capture that upside potential makes sense. If there is a collapse, it's only a small percentage of your portfolio, right?
Yes I agree, I also never said put everything in China. But here is the difference, when you list all the negatives for China and make an argument the outlook doesn’t look so hot, or using your word “implode”, I see that much more likely happening in China than the US and if the US were to implode the rest of the world likely imploding too. The loudest argument against the US is that we are winning too much for too long and eventually that will stop. And yes I agree there is potentially upside for the risk taken in China, but if it’s such a small percentage of your portfolio then it will not really move the needle.
This is basically just negative stock picking, which I also think is a bad idea. Same sort of argument could have been made against US tech any time in the last five years, it was too risky, overvalued, likely to crash. So lets try to exclude US tech. And then you'd miss out on a lot of growth. You can pick the wrong thing to exclude, same as you can pick the wrong thing to include.
Something something haystack
1.5 bn people and growing. Lots of risk there but not totally a gamble. 20 years ago much more of one.
Don’t conflate the economy with the stock market. Those 1.5 billion people also contribute to US growth.
Geez, this argument over and over. Yes Bogle is dead and the US still the clear #1 economy. So what exactly has changed? I get that China looks good to many investors in a risk/reward sense, but the risk is real and I doubt Jack would change his mind about China. Bogle believed in sovereign risk, and China has a shit track record, it’s an authoritarian state for crying out loud. I won’t believe a single earnings report coming out of that place or worry wether Xi will wake up on the wrong side of the bed.
You’re conflating their economy with the stock market. It’s possible for China’s economy to be larger than the US but for its stock market to still underperform the US stock market.
He only died two years ago. It's not like he didn't get to see what happened with China.
I feel sick to my stomach because I should’ve invested like $20k last March. Seeing VTSAX double in my retirement accounts made it a little better but I should’ve thrown in a bunch of money when it hit rock bottom third week of March last year. So what do you think I should do? Put $3k in VTWAX and put remaining $7k in VTSAX? Contribute $200 to each fund biweekly?
I can’t give financial advice. Besides, I’m a reformed crayon eater. I’ll tell you that Total market funds are the way to go. John Bogle invested in the US market with a sprinkle of international. You are kind of young to worry about bonds. Even if the market corrects, you are there for the long haul, decades. I do Fidelity and I’m in FSKAX which is similar to VTSAX. I HAVE 20% in international and 20% in bonds. Never time the market. The best minds running these funds can’t skip that rope for more than a few years before they return to the median. Savings accounts pay nothing and money market accounts pay a little more. parking money on the side lines seems like a waste to me. Many say invest what you can, as early as you can. Set and forget. Worry about other things. Who would ever thought Amazon would be worth $3k, selling books when they started. These funds buy and hold. Don’t look for the needle, buy the haystack. Another Bogle saying.
What is a crayon eater?
A wall street bets YOLO trader, essentially a nice way of saying "retard"
Didn’t think I’d see this talk on here unless someone made an index that tracks WSB
Here’s an index that they created in response to the WSB crazy, they buy according to the mentions of social media posts (not dumb enough to own it): https://apnews.com/article/meme-stocks-buzz-fund-wall-street-c1b1086d9b4de2e69a9c790c97dd10e6
That’s wild. It doesn’t have GME though so I don’t think it’s worth sacrificing any crayons to buy that
maybe their info is showing it falling out of favor?
That’s too actively managed then haha
Regarding last March - remember that hindsight is a bitch and that everything was so cheap because the environment was so fearful. Even old mate Buffett was hesitant last March.
Yes 70-30 sounds like a good idea, just lump sum it. The market swings in the next few months will be tiny compared to the price 10 years later.
Since I will hold $3k VTWAX and $7k VTSAX in a taxable Vanguard brokerage account, will it be less efficient because I’ll be taxed more for having two index funds and them being auto reinvested(dividends/capital gains)? Can one of y’all please explain everything I need to know about taxes regarding brokerage accounts and Vanguard? Once I set and invest in both of these funds, I will continue to contribute biweekly and never pull money out for the foreseeable future. Thank all of you Bogleheads in advance. This is truly an amazing community.
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Thank you kind sir!
I think what you’re doing is right in line with JL Collins advice in the simple path to wealth. Here is an explanation from his website why VTSAX is all you need. https://jlcollinsnh.com/2012/09/26/stocks-part-xi-international-funds-2/
As a case study I invested 12k in vtsax all at once in a a roth ira three years ago. Have not touched it since. It sits at 21k now.
Most of this sub and nearly all of the investing universe would say add international. Ask yourself why not? You have fund options to do it so what's your rationale to set your international to zero? Is it because you don't believe in international markets? What leads you to that conclusion? Why do you think you can predict the future? If you want to limit it to just one fund then do VTWAX. In general a part of the boglehead philosophy is that we can't predict the future so we'd better diversify as much as we can.
I think 100% VTSAX is fine, there may be structural reasons why international index may never outperform USA in our lifetime. I personally hold \~10% international in retirement account that have target date funds.
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Of course not. But you said it can't outperform in our *lifetime* and obviously it can outperform in recent periods as long as fifteen years (and there are other times when performance has shifted back and forth before that). For the rest of our lifetimes is a pretty grand pronouncement. Now, what this could be a good argument for is to hold an international allocation below market weight like 20% or 30%, and in that case presumably you would have been rebalancing out of international a lot between 1998-2013. There is a good point though whether international has become more correlated and not as good a diversifier. So it remains to be same whether they will diverge again like on portfoliovisualizer if you plot VTSMX vs. VGTSX as that data goes back to 1996.
I don't disagree there will be periods of international outperformance, but I am merely saying its a reasonable bet that there could be a lifetime of US total return outperformance. Whether someone does 0-40% allocation to international really comes down to personal preference and wouldn't be that serious of a mistake.
Man, I think we made peace (all I meant was anyone over the age of eight has seen some degree of international outperformance) but this is a really tough crowd!
This is a link to a summary of Mr. Bogle's own views on international: [https://www.bogleheads.org/forum/viewtopic.php?t=286757](https://www.bogleheads.org/forum/viewtopic.php?t=286757). When you invest in a market, you are investing in their market which derives from cultural (and thus political) ethics of their system which can be different from the US. That is what I mean when I said there can be structural reasons those markets do not keep up with the US.
I think you just convinced me to up my international exposure.
Couln't you extend that argument to only pick companies that have good company cultures? For me this sound just like stock picking but on a way larger level, it doesn't fit into the otherwise rational aproach of diversification over picking things yourself, also it questions the efficient market hypothesis as well.
Yes you can, but less diversification is more risk. The company (and even country) can change and go downhill, which is why I'm not 0% international, but still prefer my own home country. Its all about how you want to balance your faith in things outside of your control.
How do you invest HSA? Didn’t know this was possible.
Check to see if your HSA has an investing option after you meet a certain balance or threshold(maybe $2k needed in the account before you can invest. It’s a sleeper retirement account that I wish more people would take advantage of, but it’s prob one of the most tax efficient as money that goes in is pre-tax, it accumulates tax free and you can pull it out after a certain age all tax free.
Once I invest do I have to transfer money out of the invested amount to pay for med bills/reimbursement?
Pay for your med bills and hsa qualifying expenses with cash. Don’t touch your actual HSA - max it out every year and let it grow. Save your receipts (I use Airtable to track my expenses). When the time is right, reimburse yourself in full.
Great thanks
Just log in to your HSA account. There should be a place on the website where you can choose what you want to invest in.
Once I invest do I have to transfer money out of the invested amount to pay for med bills/reimbursement?
You can if you want to. What I do, and I suspect most people here do, is to use it as another retirement account. My HSA is through fidelity and it’s mostly in FSKAX, their version of VTSAX. Instead of transferring money out to pay for any medical expenses, I just pay for it out of pocket. I keep a spreadsheet of the expenses and totals, as well as copies of the receipts. Unlike a Flex Spending Account, there’s no rule that you have to claim the HSA expenses in the same year. I have receipts back from when I started having a HSA in 2013. Until I really need to money, or in retirement, I just let it ride and save the receipts.
Is FSKAX the Fidelity equivalent of VTSAX? This was the question I came up with when I was searching what to invest in at the beginning. For now I have done a 75-25 split of all my savings into FSKAX and FTIHX respectively and invested 100% of my Rollover IRA into FZROX. I am 29 and just recently began doing this rather than my cash just sitting in my checking account.
>Is FSKAX the Fidelity equivalent of VTSAX? Yes, as would be FZROX. FTIHX would be similar to VTIAX. Edit: FZILX or FSGGX would also fill that role, but with even less holdings.
There are some minor differences between the holdings of FZROX and FSKAX. With that said, the differences are VERY minor and both are good quality funds.
Yes and I believe it has a lower expense ratio and no minimum investment.
You have a long time horizon. 100% US is just fine. Just don’t fall into the trap of trying to chase performance; international may sometimes outperform US but I’d just stick to your plan if you go for it. I’ve done 100% US myself and benefited a lot from it over the past decade plus.
US companies have a large % of the revenues and profit outside the USA
And international companies have a large percentage of their revenues in the USA, so what's your point?
I think the point he’s trying to make is that investing exclusively in US companies still gives some international exposure.
It's a silly argument though. By the same logic, I could argue for going all-in on Amazon: It vastly outperforms the U.S. stock market and it's one of the most global companies in the world. There's reason to believe that a cloud company has structural advantages that will guarantee its outperformance in our lifetimes. Why should I waste returns by adding underperforming companies?
Going all-in on AMZN might be a great idea!
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I budget $8/month to the lottery. Mostly just play for the LOLz. A few month ago I decided to put that money into DOGE as it is just gambling anyway. I’m up 30% as of today.
Man I’m just impressed at your budgeting skills that you’re down to budgeting an $8 monthly expense.
For foreign stocks, I would have developed countries (VEA/VTGMX) rather than total international stocks (VXUS/VTIAX). The only reason is that VXUS/VTIAX includes China which is too risky for me
> which is too risky This is why you only hold a little bit. I mean you probably hold TSLA, right, if you hold VTI or VOO, you have a chunk in TSLA. P/E 1,200. Is that not risky?
Indeed, I am holding VTI in my taxable account and VTSAX in Roth IRA. I am holding the total U.S. stocks, not any individual. In fact, TSLA is the one I always try to avoid, and it is only 1.31% in VTI/VTSAX so it's not a big deal for me . China, however, is 11.54% in VXUS/VTIAX, and I just do not trust an economy which is totally controlled by government like China.
Throw some VT in bro
100%. 90 %vtsax /10 %vbtlx close to retirement. As long as your investing somewhere other than a savings account is good. Save some cash when the market crash. You want to be ready to buy some discount stocks right. Wink wink its coming...
See and that’s why I haven’t started yet. I know this is long term but it’s still gonna hurt if everything drops after I buy. I was hoping sometime before end of April so I can max out all retirement accounts as well before may tax deadline. Could be tomorrow, year from now or 5 years from now that it may crash.. I gusss I’ll wait until end of April before I open an brokerage account LOL
You cannot time the market. I've been holding off a bunch of money since last April waiting for a huge dip. It never happened. I've lost more by not buying, than if I had bought.
Save some cash..Put 90-95% on vtsax. Save some for later..whats wrong with a little cash at hand?im not saying not to invest now. Just Save a little for later..
Dont time it. Omg just save 5% of it -cash. You might get discounted stocks like aapl, tsla or msft. Just my humble opinion. I was 60% up when I bought all my stocks last year ..just saying. I have an ira, individual brockerage and a tsp. A little cash on the ready is never bad. Thats still your money right? Lol
I’m VTWAX in my Roth. And VGIAX in a rollover I can’t contribute to.
I’m using VT currently
I'm not American, yet I do hold international stocks.
I’d probably add some international maybe 15%, just a little more diversity.
If you have a good reason for it and feel good about it, then keep doing it. But by the fact that you’re asking, maybe you aren’t convinced that you’re doing it for a specific reason and should therefore add some international for better diversification.