Total World only and US only both make more sense then a fixed allocation, at least mentally making it easier since there is a reason one overweighted US.
Remember when the US and ex-US was about 50/50? Some investors went 60/40 US/ex-US so that they would have a moderate home bias. But now the global weight is 65/35. So anyone who went 60/40 for a little home bias now has an ex-US bias.
I realized this for myself. I went 2:1 years ago (so 33.3% ex-US). Ex-US was about 42% when I did this. Now ex-US is at 35% so it is approaching my 33.3%, so my moderate home bias would now be a sliver of a home bias.
But luckily I hadn't re-balanced in years. My ex-US went to 28%. And I remembered something I wanted to do anyway based on an article posted here before that I really took to: https://www.bogleheads.org/blog/2020/03 ... ld-part-3/
80% Total World (includes US) and 20% US. This way I always have a moderate home bias. When I went 2:1, it almost exactly matched 80% Total World / 20% US and thanks to drifting naturally, it still does - 80% of 35% is 28% right where I am. This makes it easier to deal with out-performance in either direction (hopefully, haven't seen ex-US significantly outperform yet). It is true that rebalancing with contributions can make this difficult to achieve without access to Vanguard Total World? But just taking note of things once a year and a lining balances up shouldn't be too much work.
So another shoutout to the Total Wold / US allocation. It doesn't have to be 80/20, but the article makes a convincing case. Perhaps even 60/40 for those that want strong US tilts but still want international exposure. I'd really like to hear about those that picked a fixed allocation that purposely overweighted US but now is roughly equal or even overweighting ex-US are dealing with it. Mentally for me it'd be easier to stay the course this way.
Remember when the US and ex-US was about 50/50? Some investors went 60/40 US/ex-US so that they would have a moderate home bias. But now the global weight is 65/35. So anyone who went 60/40 for a little home bias now has an ex-US bias.
I realized this for myself. I went 2:1 years ago (so 33.3% ex-US). Ex-US was about 42% when I did this. Now ex-US is at 35% so it is approaching my 33.3%, so my moderate home bias would now be a sliver of a home bias.
But luckily I hadn't re-balanced in years. My ex-US went to 28%. And I remembered something I wanted to do anyway based on an article posted here before that I really took to: https://www.bogleheads.org/blog/2020/03 ... ld-part-3/
80% Total World (includes US) and 20% US. This way I always have a moderate home bias. When I went 2:1, it almost exactly matched 80% Total World / 20% US and thanks to drifting naturally, it still does - 80% of 35% is 28% right where I am. This makes it easier to deal with out-performance in either direction (hopefully, haven't seen ex-US significantly outperform yet). It is true that rebalancing with contributions can make this difficult to achieve without access to Vanguard Total World? But just taking note of things once a year and a lining balances up shouldn't be too much work.
So another shoutout to the Total Wold / US allocation. It doesn't have to be 80/20, but the article makes a convincing case. Perhaps even 60/40 for those that want strong US tilts but still want international exposure. I'd really like to hear about those that picked a fixed allocation that purposely overweighted US but now is roughly equal or even overweighting ex-US are dealing with it. Mentally for me it'd be easier to stay the course this way.
Statistics: Posted by Crisium — Wed Dec 04, 2024 9:01 am