No idea what they were a decade ago, and they were almost certainly off. The point though is that the circumstances that had led to such large US outperformance could reverse at any time. So the conclusion being a case for owning international stocks as an added layer of diversification
Because to have max benefits from a potential period of international out performance, you need to be invested in international stocks before the outperformance happens. The trade off of international diversification is that you have to live through long periods of underperformance when US stocks crush it as they have the past decade.
It’s not a trade off everyone is willing to make, but if like me, and plan on sitting on your portfolio for another 40+ years, it’s comforting to know that no matter where in the world stocks perform best in the future, I will benefit by owning everything, everywhere.
Even in a “perfectly balanced” portfolio of US-international, US stocks would still make up nearly 60% of the equity portion of the portfolio.
I used to think so, but international equities have, overall, underperformed large cap growth US domestic equities for more than 20 years now. Best bet over the past decade has been bitcoin. Do you own any crypto? And are you fully invested now, or holding some cash? Seasonally, the end of September is almost universally a period of decreasing asset prices, with a rise in late October. Meanwhile, Michael Burry and Benjamin Graham are predicting massive devaluations.
March 3, 2010
Vanguard’s Forecast of Future Returns
By Editor Test Wed, Mar 3, 2010 SHARE ON: TwitterFacebookLinkedIn
The Vanguard Group's data suggests that annualized real returns will most likely be 6% for stocks and zero to 2% for bonds over the next 10 years.
Average performance was actually, incl. dividends +318.65%
+13.90% / yr
What were the projections for stock performance made a decade ago? Were any even remotely accurate?
No idea what they were a decade ago, and they were almost certainly off. The point though is that the circumstances that had led to such large US outperformance could reverse at any time. So the conclusion being a case for owning international stocks as an added layer of diversification
Why not wait for the trends to change?
Because to have max benefits from a potential period of international out performance, you need to be invested in international stocks before the outperformance happens. The trade off of international diversification is that you have to live through long periods of underperformance when US stocks crush it as they have the past decade.
It’s not a trade off everyone is willing to make, but if like me, and plan on sitting on your portfolio for another 40+ years, it’s comforting to know that no matter where in the world stocks perform best in the future, I will benefit by owning everything, everywhere.
Even in a “perfectly balanced” portfolio of US-international, US stocks would still make up nearly 60% of the equity portion of the portfolio.
I used to think so, but international equities have, overall, underperformed large cap growth US domestic equities for more than 20 years now. Best bet over the past decade has been bitcoin. Do you own any crypto? And are you fully invested now, or holding some cash? Seasonally, the end of September is almost universally a period of decreasing asset prices, with a rise in late October. Meanwhile, Michael Burry and Benjamin Graham are predicting massive devaluations.
March 3, 2010
Vanguard’s Forecast of Future Returns
By Editor Test Wed, Mar 3, 2010 SHARE ON: TwitterFacebookLinkedIn
The Vanguard Group's data suggests that annualized real returns will most likely be 6% for stocks and zero to 2% for bonds over the next 10 years.