International Diversification

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Recommends throw0101a · 2023-05 · on “The four times the United States government defaulted on its debt”

International diversification is generally a good idea. Good video by Ben Felix citing a bunch of research papers (with DOIs in the description): * [this video]

Cites throw0101d · 2024-04 · on “The death of the 60/40 portfolio”

> A slight over simplification, for example s&p was negative 1% per year from Jan 2000 to Dec 2009. Plus the cost of your leverage. For the 2000s, a US-only investor would only have been saved from the S&P500 by having at least 20% bonds and rebalancing: * [LINK] Of course if you were not US-only, but rather internationally diversified (and rebalanced), you would also have been fine. Diversification is important, even for Americans (cited sources in the description): * [this video]

Cites throw0101d · 2024-04 · on “Most investments are bad. Here's why”

> it took 14 years for s&p 500 to break even if you bought it in 2000 Not if you had a modicum of bonds and rebalanced: * [LINK] Or if you had international stocks. This myopia of many Americans to only look at the S&P 500… words fail me. Sheesh. Try some diversification (peer-reviewed citations in description): * [this video]

Cites throw0101c · 2025-03 · on “What We've Learned from 150 Years of Stock Market Crashes”

> Real interest rates in Japan were zero or negative for pretty much all of that same 35-year period, so bonds wouldn't have helped you either. The main thing that bonds would have helped with was in the 1980s: by regularly rebalancing to (say) 80/20 you would have taken profits off the table regularly. Further taking that (e.g.) 80% equities and putting and putting some in ex-JP/in-US would have further helped. Even for US investors the data/research suggests some international exposure leads to better results: * [this video] Further, it looks like even in the US it hasn't been "the US market" that has done well, but rather tech specifically: > Looking at this data, there are two distinct period

Cites throw0101a · 2025-08 · on “Margin debt surges to record high”

> Index funds won't necessarily save you. So first off, picking individual winning stocks is hard because new information that determines pricing comes in randomly, so good luck getting information edge on your counter-party: * [LINK] Further, <5% of stocks actually make up the vast majority of earnings: * [LINK] * [LINK] * [LINK] Those winning stocks also change over time: what used to be a winning choice can become a losing choice, so it's not like you can really set and forget things. So index funds, buying all companies (especially if you go for more total market, like US Russell 3000), allow you to sidestep all of these risks. You are basically buying companies that service the entire e