Rare is a relative term as you can't possibly know for sure what other people's lives are and what their preferences , personality, values, priorities and goals are.The vast majority of investors on this forum will need to drawdown their portfolio in the future. That's why we invest - to plan for consumption expenses at retirement when we have no income."Odd" desire according to who? The world is occupied by different folks with different strokes. Your perspective is only a very tiny portion of thinking, value, preferences, priority and etc and is in no way a representation of the others. Anyone (not just you so it's not a personal attack) who makes such judgemental comment on someone's subjective desire is evidence of close-mindedness, presumptuousness and arrogance.So if you have the (odd) desire to die as wealthy as possible, the goal would be to invest in the highest moonshot assets. Not total stock market fundsThis variation on the diversification-argument, aims to reduce volatility, even if cumulative returns are lower. Even if Asset A has historically higher returns than batch-of-assets XYZ, if there's a sequence of returns risk, then we might choose XYZ. However, that's not helpful for an investor who doesn't plan to draw from his or her portfolio, and instead is driven by strictly one consideration: to die as wealthy as possible.... I've found a clip on YouTube by James Shack, a smart young retirement planner in the UK which seems to back up my feeling about why having international equities is very useful, particularly for retirees:
https://youtu.be/eIUgjib_fm4?si=nOlT-znngYIgd2WC
Global diversification works.
Or start your own business with that free capital
If you lose it all? Who cares, you didn’t apparently need it anyway. Not sure how anyone would not need to drawdown a portfolio unless you had a pension covering all expenses
An effective way to reduce volatility of one's entire portfolio is by diversifying into assets that have a low correlation in market reaction (e.g. equities vs fixed income). When the correlation between US stocks and international stocks have been increasing, the function of reducing volatility is diminished.
Comparing "total us index vs total international index in regards to outperformance, underperformance, mitigation of volatility" to "individual stocks investing or starting a company and such" is once again a false equivalency which you seem to repeatedly make. Not a personal attack, but merely an observation.
The situation of only needing to invest for either donations or future generation inheritance alone is a rare one, and you can make a whole lot of mistakes and be just fine without needing to think about risk management.
Correlations between US stocks and International stocks is LOWER at longer horizons than US stocks vs US bonds, and longer horizons are what matters for equity investors and sequence risk issues. This argument repeatedly gets brought up that there's no need for international due to short term correlations and it's a complete myth, one only has to look at the last decade to see why.
One can make a lot of mistakes and one can make a lot of good choices. The fact is that you don't know what's going to happen and making an assumption of the likelihood of someone making mistakes vs making good choices again is merely a presumptuous thinking.
Correlations between US and international are lower at longer horizon...longer as in what? 1000 years? That sounds pretty short to me so perhaps we need to go even longer?
The fact is that the correlations between US and international have been increasing and it's widely cited by numerous places. In addition, my point of correlation was about the purpose of reducing volatility and it's clearly evident that international has not provided such function so far.
Statistics: Posted by LeslieSmiley — Sun Feb 18, 2024 2:23 pm — Replies 4996 — Views 613731