Domestic vs international stock allocation 2020. US Stock had annualized returns of 11. Jun 7, 2023 · Are International Stocks Worth the Bother? While correlations have increased and long-term returns have underwhelmed, recent results look a little brighter. Oct 14, 2020 · 68, retired. Jack Bogle believes no more than a 20% international stock allocation is reasonable. large companies) , and alternatives (e. In my research, the common recommendation for U. 1% with a standard deviation of 13. “The benefit of global diversification can be shown by comparing the volatility of a global index with that of indexes focused on individual countries. However, to get the full diversification benefits, consider investing about 40% of your stock allocation in international stocks Check out Vanguard's white paper for a deeper dive. , real To those who choose less than 40% international allocation, would you maintain your allocation if international started to outperform? Let's say it does for the next 10-20 years. Here is a historical look at their returns against U. When 20% is the only percentage of stocks that these two expert sources agree on, I feel comfortable suggesting that 20% figure. Most of what I read about the three fund portfolio suggests 80/20. Ultimately, it comes down to the weighting that you have the discipline of maintaining. Feb 7, 2025 · How much international stock exposure should you have? It’s a great question. 6% International stock had annualized returns of 10. Bogleheads as a sub or concept will tend to recommend market cap weighting, so currently about 40% of the portfolio invested internationally. Where did this “common” advice come from? May 5, 2023 · Our base case is supported by the figure below, which shows a preponderance of market return simulations in which international stocks return more than domestic stocks over the next decade. In this article, I explore the key considerations, mathematical models, and practical strategies for optimizing foreign and domestic stock allocations. international stocks), market capitalization (small companies vs. stocks outperformed international ones in eight of the past ten years. domestic equities did not keep up with the market cap allocation between the two. Jan 3, 2020 · While there is no one-size-fits-all approach for everyone, having some sort of international allocation is critical to maintaining optimal performance in most long-term portfolios. Nov 8, 2024 · Where should I start? thanks. and international for a three fund portfolio? I was reading the Bogleheads wiki, "Domestic/International," where it mentioned a 70/30 split being the most efficient. Some benefits of international investing include: Diversification. And I’ve been looking into my own foreign stock allocation lately. Jan 30, 2020 · Having some sort of international allocation is critical to maintaining optimal performance in most long-term portfolios. A market weighted allocation seems like a good starting point for new investors. For the past two years all new money (not that I have a lot of new money) for equities has gone into VEA (international developed), but it hasn't moved the needle due to the difference in performance relative to domestic equities. g. Feb 13, 2025 · If international outperforms domestic by 10% than 10% of 15% is 1. Is there a good reason to favor the US stock market in a custom allocation vs just buying VT? I see many people that have an 80/20 VTI/VXUS split or even more bullish on the US market, and I was wondering if there is a rational reason to favor the US more or if it is just home country prejudice. stocks since 1979. We would like to show you a description here but the site won’t allow us. investors that I see is an allocation of 80% into U. May 5, 2025 · A collection of asset allocation rules for every age, implied by Vanguard’s target date retirement funds. So what's your International Stock allocation, and if you agree with Vanguard and ours is too low how do you recommend we address it? For added reference, over 100k of the cash position was the result of an inheritance. 5% Almost identical returns but with less risk if you have 30% international exposure Reply reply hawksku999 • Dec 21, 2020 · Some investors might not be so comfortable holding such a hefty foreign stock allocation. When you look at professionally managed asset allocations, you typically see a somewhat lower allocation. In practice, many investors will consider an allocation to international equities well below global market-capitalization weight based on their sensitivity to a number of considerations, including volatility reduction, e Asset allocation refers to the investment strategy of balancing risk and reward by determining what percentage of your portfolio or net worth to put into various asset classes. Nov 5, 2021 · Is there a rule of thumb for deciding on the stock allocation between U. 5% with the higher international asset allocation of 35%. For most investors, a smart approach to asset allocation is a lot more important than individual stock selection. The usual Boglehead recommendations of Total International Index (VTIAX) or Developed Markets Index (VTMGX) are both rated 5 on the risk Why invest internationally? Markets outside the United States don't always rise and fall at the same time as the domestic market, so owning pieces of both international and domestic securities can level out some of the volatility in your portfolio. My domestic vs international stock split in my 401K target date fund is 60/40. Sep 11, 2008 · At the end of our meeting, we agreed on 20% international stock, for a stock allocation (for the entire portfolio) of 80% US and 20% international, Total Int'l Stock Fund. Bogle himself recommended no more than 20% of the stock allocation being international. According to Vanguard's Total World Stock Index Fund, a market-capitalization-weighted index designed to measure the market performance of large-, mid-, and small-capitalization stocks of companies located around the world, as of mid-2023 around 40% of the world's stock investment Feb 12, 2020 · A report from Vanguard found that having between a 40-50% allocation to international equities actually reduced volatility to below 15%. Apr 13, 2023 · But more recently, U. Feb 6, 2024 · The thought of also taking a huge chunk out of our S&P funds and moving to International just makes that feeling worse. How Much Do you Need? In general, younger investors can benefit by shifting a portion of their overall equity allocation into international stocks (most financial advisors recommend that no more than 30% of a younger investors' equity allocation should be in international). 7% A 70/30 had annualized returns of 11. * Vanguard researchers believe no less than a 20% international stock allocation is reasonable. Sep 5, 2025 · Domestic/international looks at how you might split your equity allocation between US and ex-US stocks. So what's the right ratio of domestic to foreign stocks? However, within investor portfolios, allocations to international equities vs. 2% with a standard deviation of 14. Keep in mind that Vanguard has a 1-5 "Risk scale" and all the international stock funds offered are either a 4 or a 5 on that scale, so the word "safe" doesn't really apply here. (domestic) stocks versus 20% into foreign stocks. Feb 27, 2025 · International stocks are outpacing the S&P 500 so far in 2025. In general, Vanguard recommends that at least 20% of your overall portfolio should be invested in international stocks and bonds. S. Asset allocation determines portfolio performance more than individual stock selection. 5 percent so your total portfolio would outperform by 1. The domestic stock portion of non-Vanguard funds as provided by Morningstar. Jun 12, 2023 · Within the stock allocation, for example, one may consider geography (U. determining the appropriate allocation between domestic and international equities. vs. How we determine domestic vs. . It’s a key thing to get right, and an […] Apr 21, 2020 · My plan is to use the target date funds in my 401K (no other good options) to do my stock vs bonds balancing, and have my Roth IRAs, HSA, and taxable 100% equities. international stocks Your stock holdings are broken down as follows: Domestic stocks Vanguard domestic stock funds, the target domestic stock portion of Vanguard balanced and global funds. I've been trying to bring my international allocation up to about 25 percent from 20 percent. Jun 17, 2020 · Historical evidence over the last 50 years suggests that an allocation of 40-50% to foreign stocks results in the highest risk-adjusted returns in an all-stock portfolio. s51hvwn 7gul tv9 1o0 mwfmnr5 jrcxw pir flay dvaxsrk y7