Dare to 'disagree' with Buffet and Bogle?

[ldarlingt]

I'm currently deciding how much US stock I should have in my portfolio, and I stumbled upon an article called Buying the S&P 500 today? Wait. These 7 Graphs Might Change Your Mind. from Banker on Wheels, which appears to be a frequently cited source in this subreddit.

The article points out that I should follow Buffett's and Bogle's principles, but not necessarily their preference for the S&P 500. I don't think the message comes through clearly because, from what I've seen in interviews with Bogle, it seems that he practices what he preaches. If he's comfortable with a high S&P portfolio, then why shouldn't I be?

 

[kaytiedid]

@ldarlingt Let's ask the author of this article directly!

@ellamoni

 

[didomach]

@ldarlingt Buffet has billions in investments outside of the US.

 

[kaytiedid]

@didomach like?

 

[christiantracks]

@kaytiedid Just look at how much he invested in Japan the 2 last years

 

[scripturewinds]

@christiantracks How's that working out for him? The yen has been declining at a steady rate for about 3 years.

 

[resjudicata]

@scripturewinds So he can say his stock are performing well. Buffet is a hoax, hands of his portfolio is invested in Apple. S&p 500 is a pyramidal scheme. If apple collapse for any reasons it will drag down many other companies witch have most of their assets invested in Apple.

 

[monstershouter]

@kaytiedid BYD

 

[bethlehem57]

@ldarlingt Since 1990, the vast majority of the US’s outperformance versus the MSCI EAFE Index (currency hedged) of a whopping +4.6% per year, was due to changes in valuations. The culprit: In 1990, US equity valuations (using Shiller CAPE14) were about half that of EAFE; at the end of 2022, they were 1.5 times EAFE. Once you control for this tripling of relative valuations, the 4.6% return advantage falls to a statistically insignificant 1.2%.

In other words, the US victory over EAFE for the last three decades—for most investors’ entire professional careers—came overwhelmingly from the US market simply getting more expensive than EAFE.

https://www.bogleheads.org/forum/viewtopic.php?p=7252006#p7252006

If you believe it could last, invest in US. I know nothing, so I invest in whole world.

 

[nathanh83]

@ldarlingt Are you in the US, with only USD assets?

 

[ldarlingt]

@nathanh83 I'm in the EU.

 

[nathanh83]

@ldarlingt Looks like you have your answer than.

 

[ldarlingt]

@nathanh83 Could you please elaborate.

 

[nathanh83]

@ldarlingt Bogle and buffet speak to us/usd investors.

 

[anthony28]

@nathanh83 Leave them - those kids will do anything to stay ignorant.

 

[nigey777]

@anthony28 It's a kindergarten

 

[anthony28]

@nigey777 It is however worrying seeing people unable and unwilling to grasp currency risk going into investing. If you want to have a fun read google CHF loans lawsuits in south east EU ...

 

[englishcatholic17]

@ldarlingt I was recently asking myself the exact same question, hence why I posted the following thread:

https://www.reddit.com/r/eupersonalfinance/comments/16j5lzp

Since then, I've decided that VWCE carries pretty much the same risk as the S&P 500 but delivers fewer results. Then, I shifted my investment strategy where I now buy just the S&P 500.

The short answer to your question - if you believe the US will continue performing well, go for it.

 

[bonin151]

@englishcatholic17

Since then, I've decided that VWCE carries pretty much the same risk as the S&P 500 but delivers fewer results.

Delivered fewer results recently. This is just recency bias.

It's not a given that the trend will continue. In fact, more often than not good performers switch places cyclically.

 

[englishcatholic17]

@bonin151 Totally fair point. My reasoning is that I don't see any other country that has the potential the US has. Investing in places like China seems riskier than going 100% US. But to each their own, of course.