Yes, but reddit and fora like this one are probably a very tiny minority. I’d expect that most people don’t tinker, have active management/big fee “advisors”, pick stocks either because “It’s yuge” or “I drive by Dunking Donuts and it’s always full” (that’s Peter Lynch, this is a joke I inserted), and little knowledge. Then you add performance chasing on top and I’d expect (no data, just feels) that most money went to “VOO/QQQ and chill”. Probably anyone who read The Simple Path to Wealth also VTSAXs and chills based on the tired “reasoning” that US companies make a lot of revenue abroad. But again, I would expect most investors to be far from VT+chill, the original Bogleheads forum quote is “VTI and chill”. Those slightly more advanced/scared add VXUS and bonds.
The annoying thing is that despite all the theorycraft, those who DID go QQQ and chill have probably compounded ahead of the Bogle 3 fund portfolio (VTI+VXUS+BND) by light years.
This is QQQ vs VTI+VXUS+BND (70/20/10), the good obedient kids got no protection from volatility and HALF the CAGR… I mean, 7.5% CAGR is great, but 14.5% is insane, at this point the “good boy portfolio” will basically never catch up to the “naughty boy portfolio”.
I think - most likely- Outperformance of Big tech led investors to QQQ. Outperformance of QQQ drove performance of VTI.
And because of the above two facts, whatever historical chart you will make for global investing, a higher weight to US will always win, and thus VT & chill became the preferred approach for Europeans too. This is why I think the paper shared by Felix is interesting because it doesn’t only look at history but is doing different types of simulations to build the concept for how a 100% equity portfolio should look like
I don’t really think that anyone (Dalio, Bogle, Lynch, UBS, JPM , Felix) actually ever proposed VT (or alike) as an investment for non-US investors
Yeah, and by a point on it becomes a self-fulfilling prophecy and the insufferable “'murica fack yea” mooks can’t be made to shut up!
Bogle was talking to US investors mostly (as is Buffett). If you take his “buy the haystack” approach you can extrapolate it to mean “buy VTI”. In other interviews he’s said he’s personally not for ex-US “but if you have to do it, no more than 20%”. Bogle DID advocate strongly for bonds, though. That said, Bogle’s arguments against ex-US were “Britain’s parliament looks weird, French are lazy, Japanese are old, we are the most entrepreneurial nation with the best systems in place, and Coca Cola sells bottles everywhere” which aren’t particularly strong!
Felix in an old interview with MrRIP from this forum, and in other places including a convo I had with him on reddit has said “VWCE is a good start”. I think his personal portfolio is 30% Canada though, with US, global, and factors making up the rest.
My issue is that once you deviate from “buying the haystack” it becomes a slippery slope. For example one may say “developed markets are where it’s at, emerging market should have emerged by now”. But then miss Korea? Taiwan (some indices). India? Where does it stop? and what weight do you assign manually? So while “VWCE/VWRL/SSAC/VT and chill” may be a “good start” I’d argue that it may also be a good middle, and end too
Ok, a few countries have good stock markets but I personally don’t quite understand home bias when it comes to stocks - or at all to be honest. The Greek market outperformed the US for several years in a row now, as did the NIFTY 50 (by a mile vs VOO), yet I have no money specifically allocated to Greece, India, or any other country ex-US, not even Switzerland and I live here!
Yes. That’s true. Most people might believe they are over exposed to US but might not know where they can tilt and hence just leave it like as it is i.e MSCI ACWI
I am trying to restrict my US exposure to about 45% for time being. That’s first objective. (currently about 50%)
I’m still aiming to increase my allocation to Swiss equities (SLICHA) to reach an allocation of (80/20 or 70/30). For the moment, VT still represents 82% of my allocation, so I’m going to keep buying SLICHA until I reach my desired allocation, a strategy I’ve been pursuing since last year.
On the other hand, I’m hesitating whether to sell VT and convert it into VWRA, or whether, once I’ve reached my allocation, to buy VWRA and sell a few shares of VT each month to convert them into VWRA.
I still have time to think about it.
I’m also thinking of buying a gold ETF like the one at Raiffeisen to make up 5% of my IBKR portfolio.
A little provocation, but fitting this thread: everyone adjusting their portfolio(s) as a result of the Orange Swan is an active investor.
Bogle would shake his head.
But…. Bogle would already be upset as people are ignoring his advise to ignore international stocks
Isn’t there like a Bogle type person from Europe? It would be interesting to hear from them. Tired of listening from Americans talking about how great it is to invest majorly in America
With the reason, that the US market already covers international because most companies sell/buy worldwide.
We had this discussion a while ago on this forum, where certain members were 100% sure that their active strategy implemented with passive instruments is a passive strategy but anyhow…
Fun fact: Bogle was a lot more active than he preached, as is Buffett. Or to paraphrase Munger “index investing is good only if you don’t know what you’re doing”.
It’s true but it doesn’t slice the way some might interpret. That “only” is a pretty big one. Most of us, most of the time, don’t really know what we are doing. Acknowledging that isn’t a sign of weakness and passive investing is good in those situations.
The time not spent in increasing our investing knowledge and studying companies can be spent on other things that might increase our value more (by increasing income) or bring us more joy.
Active investing isn’t a bad word either for those who think they know what they are doing. To each their own.
Yep 100%, Charlie was also balanced. Sounds like he’s looking down on index investing but he didn’t actually say it’s bad. What never ceases to amaze me with this epic duo is how accurate and economical both are with words.
Agreed. Your point is of course correct but orthogonal to …
My point, which was really that index investors actively messing around in their portfolio with this-ETF versus that-ETF aren’t really as, ahem, passive, as they think they are.
As the hypocrite that I am, completely along your orthogonal line, I believe passive is great, especially internationally*, where I consider myself preferring to spend my time on international things (wine, cheese, bread, …) that bring me joy rather than trying to understand how international companies really work, report earnings, are best fundamentally valued, etc …
Narrator: “Goofy logs into his Swissquote account to look at his quite sizable VXUS position and zooms into the performance graph until he’s found a time frame where VXUS returns look absolutely fabulous.”
* Why the heck -- as a Swiss -- do we I even call ex-US internationally? Stockholm syndrome?
Anyway ...
Sure! And true. I haven’t developed my reasoning enough to address that: when I write that “active investing” isn’t a bad word, what I’m implying is that there’s no reason to deny it when we are and want to absolutely stick a passive label to ourselves under the premise that “passive is good” and “active is bad”.
Messing around with our portfolios no matter if using passive ETFs is an active move.
I think there’s a lot of dogmatism - not here but in other fora/social media - and people don’t differentiate well enough between layers of active vs passive investing vs trading vs degeneracy in r/wallstreetbets.
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