I would like to see some of our more thoughtful posters weigh in on the relative merits and demerits of increasing our international exposure with our investments. Over the short term, meaning since I significantly increased my foreign equity allocation from about 5-10% to closer to 25-30% starting in the spring of last year, my international holdings have significantly outpaced my U.S. holdings.
I think this could be a real sea change, based upon our alienation of our long term friends and allies causing them to do things like this:
I could be wrong but at this point I would like to hear from people who are shifting to a more international allocation, and specifically how they are doing it.
I recently moved a significant portion of my retirement assets into developed international investments due to the continued weakness of the dollar. I moved approximately 20%. I had no direct exposure to international prior to that move as it had underperformed 8 out of the last 10 years. Last year was one of those years. EAFE was up 30%. YTD it is up 5% while the S&P is up 1.6%.
I am strongly considering a larger move soon - up to 40%. Absent SCOTUS striking down tariffs in a conclusive manner, I don’t see the dollar getting stronger in the short run.
I am simply buying the EAFE via ETFs. Specifically, I purchased EFO (EAFEx2).
Thank you. I seem to be arriving at similar conclusions and using a similar approach. Even very similar percentages. My international and European ETFs, vsgx and vgk are up about 32% over the past year, roughly double my U.S. returns, and appeared to spike upward again this morning following the eu/India trade deal.
Historically international stocks only outperform the U.S. over one or two year stretches, and the U.S. outperforms in the long run. My decision to view this as a sea change - a sell USA trade based on my belief that this not just a one or two year blip, could very well be wrong.
And yes, you will absolutely lose more on a drawdown than you will gain on the upside. All 2x and 3x funds work that way. I can’t say that I care.
I have owned QLD (2x NASDAQ 100) for nearly two decades. I dropped 10k in it in 2009 or 2010 (I can no longer recall) and it has gained roughly 8,000% ($886,000 as of today) since that time. My only mistakes were not putting more in and getting out a few times when I got fearful.
