Submitted by ToenailRS t3_zzv1bu in personalfinance
Cruian t1_j2ej4ru wrote
Reply to comment by ToenailRS in VTI or VTSAX which is the better choice long term? by ToenailRS
VNQ is already fully included within VTI: https://www.etfrc.com/funds/overlap.php
As /u/DeluxeXL mentioned, going outside the US is going to be diversification. Anything stock based within the US is already covered by VTI (or far too small and difficult to trade to be worth bothering with).
ToenailRS OP t1_j2ejoue wrote
>d
That website looks neat. Ill take a look now. I'll need to do more research and get a better understanding of where and how much I'd like to diversify.
Cruian t1_j2ek9v3 wrote
Ex-US might look unappealing now if you simply look at a back test. However, to some of the more knowledgeable, that bad looking back test can be a very good thing.
For reasons on why diversifying beyond the US can be very important, please see:
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https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths if that link doesn't work: https://web.archive.org/web/20201112032727/https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths (Archived copy from Archive.org's Wayback Machine)
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https://www.pwlcapital.com/should-you-invest-in-the-sp-500-index
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https://www.evidenceinvestor.com/which-country-will-outperform-next-is-irrelevant/
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https://movement.capital/summarizing-the-case-for-international-stocks/
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https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl_KeyInd_2018.pdf (PDF) or https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) or the archived versions if those don't work: http://web.archive.org/web/20201212205954/https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl_KeyInd_2018.pdf (PDF) & http://web.archive.org/web/20201205183933/https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) (Archived copies from Archive.org's Wayback Machine)
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Of rolling 10 year periods since 1970, EAFE (developed ex-US) has beat the S&P 500 over 45% of the time: https://www.tweedy.com/resources/library_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf (PDF) or for the archived version: https://web.archive.org/web/20220501183228/https://www.tweedy.com/resources/library_docs/papers/Dichotomy%20Btwn%20US%20and%20Non-US%20Mar2022.pdf
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https://www.vanguard.com/pdf/ISGGEB.pdf (PDF) or the archived version if that doesn't work: https://web.archive.org/web/20210312165001/https://www.vanguard.com/pdf/ISGGEB.pdf (PDF)
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https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters or if that link doesn't work: https://web.archive.org/web/20190124072925/https://www.schwab.com/resource-center/insights/content/why-global-diversification-matters
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https://fourpillarfreedom.com/should-you-invest-internationally
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https://mebfaber.com/2020/01/10/the-case-for-global-investing
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https://www.reddit.com/r/Bogleheads/comments/ii0sa2/considering_usonly_investing_start_here/
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https://investor.vanguard.com/mutual-funds/profile/portfolio/vtwax - Global market cap weights. I'd argue this should be the default position.
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https://investor.vanguard.com/investing/investment/international-investing - Vanguard 40% of stock is recommended to be international. This is what both Fidelity and Vanguard use in their target date funds.
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https://twitter.com/mebfaber/status/1090662885573853184?lang=en with this reply: https://twitter.com/MorningstarES/status/1091081407504498688
ToenailRS OP t1_j2ekx7h wrote
This is fantastic information. Wow thank you for taking the time to link and write all this out!! Thank you so much. Ill take a look at these shortly.
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