The Meb Faber Show - Better Investing
Mebisode – What If You Owned No US Stocks? | #504
Oct 18, 2023
Mebisode discusses the idea of owning no US stocks and challenges the belief that stocks are the best way to build wealth. It explores the concept and benefits of this approach, analyzing returns, statistics, and different portfolio strategies.
10:11
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Quick takeaways
- Diversified allocations without US stocks can achieve similar returns as portfolios with US stocks, challenging the conventional belief that US stocks are the only way to build wealth.
- The mindset of being an owner and the discipline of saving and investing are more important for wealth building than the specific assets owned, highlighting the significance of expenses, taxes, and investor behavior in long-term results.
Deep dives
Building Wealth Without Owning US Stocks
The podcast episode explores the idea that while US stocks are often considered the best way to build wealth, there are alternative strategies that can be equally profitable. The host discusses a backtest comparison between US stocks and a diversified allocation that excludes them, including assets like REITs, foreign equities, and bonds. Surprisingly, both allocations achieved nearly identical returns of around 10.2% per year since 1972. This challenges the notion that US stocks are the only path to wealth accumulation and highlights the importance of considering other assets and diversification.
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