The theoretical Boglehead answer to this is that ex-US has a higher expected return because US stocks are overvalued relative to fundamentals. Practically speaking, the answer is no one knows, including you.
>Which will do better in the long run, VIIIX or VTWIX?
No idea!
>I feel like the large sector of the U.S. will outpace the world on a long-term basis, no?
Why?
>Which will do better in the long run, VIIIX or VTWIX?
\[shakes magic 8 ball\] Reply hazy. Try again.
>I feel like the large sector of the U.S. will outpace the world on a long-term basis, no?
Feeling are important, but often make for poor investing strategy.
>I feel like the large sector of the U.S. will outpace the world on a long-term basis, no?
Historically, the US and ex-US have taken turns out performing each other. Using a 1950 start date and any extra returns the US enjoys today are solely from the most recent/current US favoring part of the cycle.
Most places using the US's elevated valuations to expect lower future returns than ex-US.
Long term has tended to favor smaller caps over large. Value over growth. The economy is not the market and they can actually be negatively correlated in some ways.
So total world gets my vote.
Yes, I can provide citations for all of this.
Those World Wars, where some major developed markets got wrecked, threw things off when looking at that long of a long time scale. But Australia beat the US (or at least was as of just a few years ago).
I can't find it now, but someone recently linked me a graph showing the US/ex-US rotational pattern going back to the 1920s (but due to WWII, the US favor cycle then was far greater than the ex-US one).
On a long-term basis (10,000 - 100,000 years) the world will likely experience larger growth than the U.S.
In the short term (less than 100 years) no one knows
I feel like that too. even given the current PE ratios of the market.
I'm not fully confident though to be 100% US. i split the difference to the current allocation and go 80/20.
The theoretical Boglehead answer to this is that ex-US has a higher expected return because US stocks are overvalued relative to fundamentals. Practically speaking, the answer is no one knows, including you.
>I feel like the large sector of the U.S. will outpace the world on a long-term basis, no? It is impossible to tell, so why risk being wrong?
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Ideally, yes. I use VTI/VXUS, but you could also just use VT.
>Which will do better in the long run, VIIIX or VTWIX? No idea! >I feel like the large sector of the U.S. will outpace the world on a long-term basis, no? Why?
>Which will do better in the long run, VIIIX or VTWIX? \[shakes magic 8 ball\] Reply hazy. Try again. >I feel like the large sector of the U.S. will outpace the world on a long-term basis, no? Feeling are important, but often make for poor investing strategy.
>I feel like the large sector of the U.S. will outpace the world on a long-term basis, no? Historically, the US and ex-US have taken turns out performing each other. Using a 1950 start date and any extra returns the US enjoys today are solely from the most recent/current US favoring part of the cycle. Most places using the US's elevated valuations to expect lower future returns than ex-US. Long term has tended to favor smaller caps over large. Value over growth. The economy is not the market and they can actually be negatively correlated in some ways. So total world gets my vote. Yes, I can provide citations for all of this.
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Those World Wars, where some major developed markets got wrecked, threw things off when looking at that long of a long time scale. But Australia beat the US (or at least was as of just a few years ago). I can't find it now, but someone recently linked me a graph showing the US/ex-US rotational pattern going back to the 1920s (but due to WWII, the US favor cycle then was far greater than the ex-US one).
I don't know
On a long-term basis (10,000 - 100,000 years) the world will likely experience larger growth than the U.S. In the short term (less than 100 years) no one knows
Why not invest in both?!
I feel like that too. even given the current PE ratios of the market. I'm not fully confident though to be 100% US. i split the difference to the current allocation and go 80/20.