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Topics - Arkad

#1
I recently saw this article in the Wall Street Journal. It seems that many are suggesting that the Fed's near-zero interest rate policies are driving investors looking for decent returns to riskier assets that in the past could be had with less volatile portfolios.

http://www.wsj.com/articles/pension-funds-pile-on-the-risk-just-to-get-a-reasonable-return-1464713013

Thoughts on what this means for investors? It begs the question...how much of the market's movement in the past couple of years has been based on sustainable economic growth, and how much has been based on easy money policies driving up asset prices, or some combination? I am not sure there is any way to know for sure. 
#2
Strategies / International ETF Exposure
June 21, 2016, 11:22:23 PM
I am a passive investor that subscribes to a dollar cost averaging philosophy on broad indexes. Although in my view markets are not efficient and there are plenty of opportunities for bargains, I prefer the simplicity of passive index investing through ETFs. My portfolio is largely made up of S&P and US small cap ETFs.

One issue I am trying to figure out is how much international exposure I want, if any. I am looking at  large-cap international ETF for around 10 to 20 percent of my portfolio (for example, Vanguard's VEU).  As I have thought about this, I have gone back and forth in my thinking:

Pros: International exposure diversifies portfolio, US equities may be overheated increasing attractiveness of other markets/broader exposure.

Cons: Slightly higher fees, large-cap foreign is highly correlated to US S&P anyway, returns over past several years have been dismal (although this is no indicator of future, results), US Large cap stocks have plenty of foreign exposure anyway due to financial globalization.

Does anyone have any thoughts of the usefulness of broad foreign exposure to diversify a portfolio? Are there any pros or cons that I am missing? Part of me thinks that diversification into international ETFs is overrated, but part of my thinks it has a place in a balanced portfolio.