• Posts
  • RSS
  • ◂◂RSS
  • Contact

  • Index Funds: US vs International

    May 23rd, 2018
    money  [html]
    I think the efficient market hypothesis is basically right, in the sense that I'm not not going to be able to beat the average return, and so I'd more or less like to hold an even slice of everything there is to own. Talking to people and reading online, it seems like it's common to invest ~60% in the US and ~40% internationally. Why is that? The US total stock market cap is only about 30-40% of the world's, so I'd think the default position would be to mirror that, perhaps by buying shares in a total-world index. Reasons I've heard for weighting the US higher seem to be based on things like the US having higher returns historically, but that should be priced in.

    If anything, I think for Americans overweighting international stocks would make more sense, since we're already very long on the US. Similarly, if there were an index fund that excluded tech I think that would be a good buy for me since I'm effectively quite long there through my investment of being a programmer.

    What's going on? Why does "index fund" typically mean "S&P 500" and not "total world"?

    (It looks like maybe this is called "home bias" and economists think people shouldn't do it?)

    Comment via: google plus, facebook

    Recent posts on blogs I like:

    Streaming the Biden Infrastructure Plan

    I streamed my thoughts about the Biden infrastructure plan, and unlike previous streams, I uploaded this to YouTube. I go into more details (and more tangents) on video, but, some key points: Out of the nearly $600 billion in the current proposal that is …

    via Pedestrian Observations April 11, 2021

    Collections: Clothing, How Did They Make it? Part IVb: Cloth Money

    This is the second half of the fourth part of our four part (I, II, III, IVa) look at the production of textiles, particularly wool and linen, in the pre-modern world. Last time, we looked at commercial textile workers and the finishing processes for text…

    via A Collection of Unmitigated Pedantry April 9, 2021

    Notes from “Don’t Shoot the Dog”

    I just finished Karen Pryor’s “Don’t Shoot the Dog: the New Art of Teaching and Training.” Partly because a friend points out that it’s not on Audible and therefore she can’t possibly read it, here are the notes I took and some thoughts. It’s a quick, eas…

    via The whole sky April 2, 2021

    more     (via openring)


  • Posts
  • RSS
  • ◂◂RSS
  • Contact