# Vanguard Recommends Investors Increase Non-U.S. Holdings to 40%
**URL:** https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700
**Category:** Investing / Others
**Created:** [January 11, 2019, 7:27pm UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700 "2019-01-11T19:27:18Z")
**Posts on this page:** 6
**Page:** 1
### Author:  [@ajPT](https://forum.mustachianpost.com/u/ajPT)
#### Post date: [January 11, 2019, 7:27pm UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/1 "2019-01-11T19:27:18Z")
> Investors should put about 40 percent of their portfolios in non-U.S. stocks and bonds to diversify their holdings, according to top executives at [Vanguard Group](https://www.bloomberg.com/quote/5125Z:US), the fund giant that manages $4.9 trillion.
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> Global stock markets are likely to outperform the U.S., which the firm expects to return roughly 4 percent to 6 percent annually over the coming decade, Chief Executive Officer Tim Buckley and Chief Investment Officer Greg Davis said Thursday during a webcast.
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> Vanguard formerly recommended allocating about 30 percent of portfolios to non-U.S. assets, the executives said. One reason for the increase: Fees have fallen on international funds, improving net returns.
More @
[https://www.bloomberg.com/news/articles/2019-01-11/vanguard-recommends-investors-increase-non-u-s-holdings-to-40](https://www.bloomberg.com/news/articles/2019-01-11/vanguard-recommends-investors-increase-non-u-s-holdings-to-40)
What do you guys think?
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### Author:  [@1000000CHF](https://forum.mustachianpost.com/u/1000000CHF)
#### Post date: [January 11, 2019, 7:43pm UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/2 "2019-01-11T19:43:46Z")
I think they’re right. Therefore I invest in VT ETF.
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### Author:  [@oozoo](https://forum.mustachianpost.com/u/oozoo)
#### Post date: [January 11, 2019, 10:54pm UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/3 "2019-01-11T22:54:23Z")
I don’t know …
Where is the growth supposed to come from?
Certainly not from China or Europe
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### Author:  [@1000000CHF](https://forum.mustachianpost.com/u/1000000CHF)
#### Post date: [January 12, 2019, 9:08am UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/4 "2019-01-12T09:08:07Z")
Maybe Pacific and India or other parts of the world?
Correlation between GDP and stock market is somewhat ambiguous. @hedgehog once post here a link to MSCI paper that showed that it can be even inversely correlated. I think one has to look at how much space companies have to expend their operations instead of macroeconomic oulook of a given country where they’re located.
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### Author:  [@bamboo](https://forum.mustachianpost.com/u/bamboo)
#### Post date: [January 13, 2019, 3:08am UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/5 "2019-01-13T03:08:34Z")
I think that Bloomberg is right but their advise comes a bit too late.
Growth is not the only important matter, price to book value (p/b) or price to earn ratio (p/e) show what for return you can expect.
Two examples:
S&P500: p/e~20 p/b~3.0
DAX30: p/e~12 p/b~1.5
The German index seems to be a real bargain compared to the US index. From the numbers above I can expect 8% return from my German shares but only 5% return from my US positions, if the earning growth rate is 0.
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### Author:  [@Zerte2](https://forum.mustachianpost.com/u/Zerte2)
#### Post date: [January 13, 2019, 7:04am UTC](https://forum.mustachianpost.com/t/vanguard-recommends-investors-increase-non-u-s-holdings-to-40/1700/6 "2019-01-13T07:04:24Z")
NB: the advice is from Vanguard executives, not from Bloomberg !
I love the 2nd point:
> Stay invested. “Going all cash is way too risky,” Buckley said.
If a “fund giant that manages $4.9 trillion” did recommend to go all cash, they would for sure crash the market !
3rd point:
> Long-term U.S. Treasury yields are likely to rise as supply grows with an expanding deficit and foreign buyers diminish.
Not mentioned there, on the supply side: the Fed is now unloading its balance sheet, while at the same time hiking interest rates (which expands the deficit even more) - ouch !