Financial Independence Daily FI discussion thread - September 30, 2020 |
- Daily FI discussion thread - September 30, 2020
- Weekly Self-Promotion Thread - September 30, 2020
- Concerns About International Stock Returns Over the Long Run
| Daily FI discussion thread - September 30, 2020 Posted: 30 Sep 2020 01:07 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Weekly Self-Promotion Thread - September 30, 2020 Posted: 30 Sep 2020 01:07 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| Concerns About International Stock Returns Over the Long Run Posted: 30 Sep 2020 02:54 PM PDT A few weeks ago, I told someone on this sub that it's sensible to put around 30% of your portfolio into international stocks. Keeping in line with the typical simple 60-30-10 portfolio. This got me thinking, though, and I recently got into my Vanguard account to see if what I said actually made sense in my case. My international fund, VXUS, is about 25% of my taxable account portfolio, with VTI at 65% and BND at 10%. Turns out VXUS hasn't been great to me in the 2.5 years I've bought shares on a bi-weekly basis. My account being a true "buy, hold and forget about it" account, I never looked into it before, and now I'm kind of flabbergasted it has done so poorly. $1,306 in gains (and only in dividend income—not on any capital gains) on a $36,948 cost basis over 2.5 years, resulting in a 3.5% return. I never imagined it would be that low over a 2.5-year period. On the other hand, VTIAX, which I have in a Roth IRA, has given me better return of 10.1% over this 2.5-year period. Even my bonds (BND) are performing better than VXUS at an 8.4% return rate. But, taking a step back, when comparing VTIAX and VXUS over the course of their lifespans since Dec. 2010/Jan. 2011, there's not much difference for the long-term "buy and hold" investor. They both are stinkers. There's no gradual, relatively continuous increase in value of either. They seesaw up and done for an entire decade, giving the "buy and hold" investor nothing but dividend payments. VTIAX and VXUS Performance Over 10 Years On the other hand, looking back, I could have avoided VXUS and simply put the $36,948 into VTI on a bi-weekly basis (on top of what I was putting into VTI already). During the same 2.5-year period, my rate of return with VTI is 17.1%. Had I done this, I'd have another $6,281 in capital gains, not including income returns in the form of dividends. All that said, am I missing something critical? I fully understand international exposure, in theory, can help hedge against volatility and down markets the U.S. But even Vanguard's highest-performing international ETF, VSS, pales in comparison to the S&P500. I know the past does not predict the future. But am I in the minority, steadfastly tucking cash into international ETFs? Or maybe there are better international funds out there than VXUS, VTIAX and so on. [link] [comments]  |
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