International stocks have suffered twice as many bear markets than U.S. stocks since 1970. They’ve also lagged the U.S. stock market by about 1% per year.
So, why in the world would anyone want to invest in international stocks? We discuss this and more in this week’s podcast episode:
Topics we discuss:
- How to invest in international stocks
- What asset classes belong in a portfolio and what asset classes should be removed
- The proper percentage to allocate to each asset class
- How to implement this portfolio on your own
- A look at our portfolios and how we construct them
How to Listen to Today’s Episode
Episode Links & Resources:
Episode Transcription
[fusebox_transcript]0:50 – Welcome and overview of today’s topics
2:53 – The indexes were are referring to when we say international stocks
3:27 – Some stats and history on international stocks compared to U.S. stocks
6:47 – The importance of diversification (hint: it’s not for a higher rate of return)
8:09 – Dimensional Funds a.k.a. the greatest asset manager you have probably never heard of
9:01 – The value premium, what it is, and why it exists
12:11 – John Bogel’s views on international stocks and why we think he might be wrong
12:52 – Do I Need to Own International Stocks? [Blog Post]
17:58 – International stocks appear to be undervalued and what that might mean for the future
20:52 – What asset classes you should have in your portfolio
23:51 – What asset classes we don’t include in a portfolio
24:14 – Check out Jon’s nerdy research paper that was published in the Journal of Financial Planning: Examining Total Portfolio Performance: U.S. Government Vs. Corporate Bonds
26:11 – How to hedge your portfolio against a catastrophic event without buying expensive hedge funds
28:31 – Determining the right percentage to allocate to each asset class
30:12 – David Swenson’s recommended portfolio
31:54 – Strategies for implementing Swensen’s portfolio
34:18 – Three-Fund Portfolio book
36:11 – Free trades aren’t free and why you need to keep a close eye on the bid/ask spread [Blog Post]
36:42 – NAPFA.org
37:27 – What is the best way to grow your investments
