Episode 362: Considering International Stock Funds, DBMF Benchmarks, Reviewing a 70/20/10 Portfolio And More Trogdor!

Aug 22, 2024

Guest

Richard

Guest

Jamie

Guest

Robert

Robert, an expert in international stock funds, Jamie, an inquisitive Boglehead, and Richard, a proponent of early retirement, dive into critical investment strategies. They discuss the limitations of traditional portfolios, specifically the Boglehead approach. The trio examines the nuances of diversification, highlighting the unexpected similarities between international and U.S. stocks. They also review a unique 70/30/10 risk-parity portfolio, tackling real-world concerns while offering valuable insights on transitioning towards retirement investing.

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Intro

00:00 • 2min

Navigating Investment Diversification

02:01 • 15min

Understanding Managed Futures Fund Benchmarks and Portfolio Insights

16:53 • 3min

Navigating Retirement Investments

20:14 • 7min

Navigating Portfolio Construction

27:06 • 7min

In this episode we answer emails from Robert, Jamie and Richard. We discuss transitioning away from a Boglehead Three Fund portfolio due to its obsolete nature, a query about the DBMF prospectus and an early retirement with a 70/30/10 risk-parity style portfolio in the face of some spurious Sonia-like objections.

Links:

Father McKenna Center Donation Page: Donate - Father McKenna Center

Merriman Best-In-Class ETF List: Best-in-Class ETF Recommendations | Merriman Financial Education Foundation (paulmerriman.com)

Morningstar Portfolio Analysis Of VTI: VTI – Portfolio – Vanguard Total Stock Market ETF | Morningstar

VXUS: VXUS – Portfolio – Vanguard Total International Stock ETF | Morningstar

AVDV: AVDV – Portfolio – Avantis International Small Cap Val ETF | Morningstar

AVES: AVES – Portfolio – Avantis Emerging Markets Value ETF | Morningstar

Early Retirement Now Spreadsheet Toolbox: An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) - Early Retirement Now

Amusing Unedited AI-bot Summary:

What if your international and bond funds aren't providing the diversification you think they are? On this episode of Risk Parity Radio, we address Robert's inquiry about optimizing his family's portfolio during the accumulation phase. We'll dissect the limitations of total international funds when paired with a U.S. S&P 500 or total market fund, and why they may fail to deliver the diversification you seek. We'll also explore Robert's proactive strategy of reallocating bond investments into stock funds during market downturns and discuss the merits of increasing U.S. stock exposure while rethinking the necessity of international holdings.

We'll further challenge the conventional wisdom of international versus domestic funds and introduce modern alternatives that can bring true diversification to your portfolio. Recommendations from the Merriman Foundation, such as AVDV and AVES, are highlighted for their potential to balance your investments by tilting towards small-cap and value stocks in international markets. Lastly, we dive deep into the complexities of fund disclosures and benchmarks, offering alternative methods to evaluate funds more effectively. Gain insights that will guide you toward a more strategic and diversified investment approach for long-term growth.

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