Horosho
If only I had any beet
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Look, for investment success it is better to be if not happy with the portfolio, but at least to have a conviction in it.
The US market it just plain better than exUS. Having said that, I don’t mean you should only invest into it. The superior quality of the US market is reflected in its valuation, its f@cking expensive. Europe is also expensive, but less so – you get a discount for the same profits.
The rational thing is to assume that the expected risk-adjusted return is the same for the US and exUS. You cannot know which horse will come first. You diversify and let the market decide or the future to let it see, unfold. Theoretically the best way to achieve max risk-adjusted return is to follow the average dollar. From this follows that VT or any similar vehicle is the best choice. And the time will tell.
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From Vanguard’s 2025 outlook:
Full paper here: https://advisors.vanguard.com/content/dam/fas/pdfs/ISGVEMO.pdf
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Vanguard has been saying this for years based on the analysis with their capital markets model. Had you followed their assessment, you’d be much poorer today.
Everyone knows that the US equities are expensive, exUS is less expensive, and value is relatively cheap. Some day, the reality will catch up. But as randomness dominates, no one relibly knows when that will happen.
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I don’t think Vanguard is suggesting not to invest in US. They are simply estimating the expected return which could be used for financial planning purposes.
I doubt that such forecasts are intended to change the asset allocation strategies for a typical investor. They are mainly aimed to share their views of the market and for financial planners to use these numbers for planning purposes
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Agree with this. The practical value of Vanguard estimations is limited to planning, but it is not actionable as an asset allocation tool.
On the other hand, PWL, mostly known through Ben Felix and Rational Reminder, uses 75% historic returns and 25% valuations-based estimate for planning purposes.
I personally see only entertainment value in such reports.
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In another outlook* I found the authors arguing that there’s currently no US exceptionalism.
They’re looking at it in terms of GDP (versus, say, market valuation):
While there has been much talk about US exceptionalism, by historical standards the US’s
post-Covid performance hasn’t been truly exceptional at all. Over the past five years, the
US economy has outgrown its OECD peers by 50 bps per year in real GDP terms. We define
exceptionalism as the ability to durably outperform peers by at least 1 standard deviation
per year, and our analysis suggests that this requires 250 bps outperformance in real GDP
terms on an annual basis. Based on analysis of 20 countries from 1900-2022, we find that
on several occasions countries have managed to outperform their peers by at least 1
standard deviation (equating to 250 bps higher real GDP growth per year) for 10
consecutive years (Germany 1945-1954, Japan 1954-1963). From a historical perspective,
the US has yet to prove its credentials.
* BTW, off topic, I’m often amazed by these reports and outlooks. The amount of data and work that went into them seems massive – and I can download them for free!
Of course, the irony is that I can’t really act on them …
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Pop(corn)? 
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Heh, I was expecting that (edit: meaning I was expecting this gif). Noise.
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-3.14% 
So. I managed to sell my shares in UNH and CI…
j/k 
Christmas colors 
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Nah, you want a crash to lower your wealth taxes just before year end!
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Did @cortana get his 13th salary yesterday?
Or is it because of ECB?
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Was due to fed decision (they signalled not cutting interests as much as expected in the future)
And said they made no further progress on inflation and actually expect it to pick up more again.
Trump‘s tarriffs gonna be funny now…
Also rate hikes again in the not so dustant future are not off the table.
FED signaled 2 cuts in 2025 and 4 were priced in. I didn‘t do anything
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Meanwhile I´m sitting pretty here with the outlook for my SARON mortgage, wonder if this FED change will impact SMB rates in 2025+